The Business Times carried an article on Friday 10 June 2016 that highlighted a Singapore-based firm that has started a fund to buy "death spiral" convertibles.
See attached link for the article:
Death Spiral Convertibles
or attached file: Death Spiral Convertibles
These convertible notes have gained a negative name because of the dilutive impact on the underlying shares of a company. The notes set the conversion discount and not the price. This could result in some notes having the potential to create a negative impact on a company's stock due to increasing dilutions to the company's stock with each round of conversion taking place.
According to the Business Times article, the firm has previously made such deals with Attilan Group (the former Asiasons Capital), Elektromotive Group, Yuuzoo Corp, Cacola Furniture International and OLS Enterprise.
Another firm that is active in such bonds has deals with Annica Holdings, ISR Capital, Magnus Energy Group and LionGold Corp.
Trade these stocks with some care if such convertible notes are still outstanding.
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