Vantage Drilling Company Common Shares (VTGDF)

[luvgrowth]

DEFINITION of 'Senior Convertible Note'

A debt security that contains an option where the note will be converted into a predefined amount of the issuer's shares. A senior convertible note has priority over all other debt securities issued by the same organization.

Since the bondholder receives two benefits not found on a normal bond issue (a call option and first priority for recourse in the event that the issuer goes bankrupt), the amount of interest offered to the bondholder will tend to be lower than on any other bond offered by the same issuer.

BREAKING DOWN 'Senior Convertible Note'

The worst-case scenario would be if the issuing company initially performed well, meaning that the debt would be converted into shares, and subsequently went bankrupt. The converted shares would become worthless, but the holder of the note would no longer have any recourse.

http://www.investopedia.com/terms/s/senior-convertible-note.asp

...WHY oh WHY did Anchorage convert its SENIOR NOTE into VTGDF shares in Q4 2015 at a price of $2.39 per share? Ulrich is a Goldman Sach's alumni...I think the logical answer to the VTGDF saga will come, in part, from this question...we all shall see...


https://www.sec.gov/Archives/edgar/data/1300714/000090514815000331/efc15-137_fmsc13g.htm, accessed July 28 2016

https://www.sec.gov/Archives/edgar/data/1300714/000090514816001385/efc16-152_fmsc13ga.htm, accessed July 28 2016