What is a 'senior convertible note'?

A senior convertible note is a form of debt. The term 'convertible' means that, under specified conditions, the note may be converted—according to a predetermined conversion ratio—into the company’s common stock or other equity-like securities (in the case of Qihoo 360, American Depositary Shares, or ADSs). The term 'senior' indicates that, prior to conversion, holders of these notes enjoy priority over unsecured creditors in claiming the company’s assets in the event of bankruptcy. Essentially, upon reaching the conversion date, if the company performs well, creditors may elect to convert their debt into equity, thereby participating in dividend distributions and capital gains from stock appreciation. If the company performs poorly, creditors may retain the debt instrument; in the event of bankruptcy, they would rank ahead of both shareholders and general unsecured creditors in claiming the company’s assets. This structure lowers the investment risk while increasing potential returns, enabling the company to borrow at a relatively lower interest rate. For existing shareholders, however, this is not necessarily favorable: once creditors elect to convert debt into equity, earnings per share become diluted, inevitably exerting downward pressure on the stock price.

Corporate Financing Methods (V): Perpetual Notes

Having previously discussed ultra-short-term commercial paper and medium-term notes, this section addresses long-dated callable medium-term notes—commonly referred to as 'perpetual notes.' These perpetual notes feature significantly longer tenors. Are these instruments differentiated solely by maturity length? Not quite. The 'long-dated callable medium-term notes (perpetual notes)' covered herein are structured—prior to issuance—via specific contractual provisions so that they may be classified as 'other equity instruments' and recorded under 'shareholders’ equity' on the balance sheet. In plain language: although these instruments are issued as debt, their repayment timing is indefinite (or entirely at the issuer’s discretion); moreover, under certain conditions, the issuer may even defer interest payments without incurring penalties. This approach—though seemingly brazen—is highly effective in practice. For the borrower, it delivers two key benefits: first, immediate access to funds; second, a reduction—or at least no increase—in the debt-to-asset ratio. How is this achieved? In straightforward professional terms: 'These perpetual bonds have no fixed maturity date; the issuer retains the right to defer interest payments; the true redemption option rests solely with the issuer; and there exists no contractual obligation to deliver cash or other financial assets to any third party—hence, they are classified as other equity instruments.' To illustrate the advantages of perpetual bonds, we cite Xiamen ITG (Stock Code: 000701), which issued perpetual bonds in 2015. Below is a screenshot of relevant information to help clarify these benefits. Appendix: Key Principles in a Perpetual Bond Issuance Framework I. Issue Amount: Up to RMB X billion in long-dated callable medium-term notes may be issued within the People’s Republic of China, with issuances permitted in tranches. II. Tenor: The notes shall remain outstanding indefinitely until redeemed by the issuer pursuant to the terms stipulated in the offering documents; maturity occurs only upon such redemption. III. Interest Rate: The notes bear a fixed interest rate. The final coupon rate is determined through consultation between the issuer and the lead underwriter based on results from a centralized book-building process. The coupon rate for the initial M (typically 3–5) interest periods will be set via centralized book-building and allocation, and will remain unchanged throughout those initial M interest periods.

Calumet to Redeem $150 Million Senior Notes Due 2028

Oct 15, 2026

Calumet Specialty Products Partners will redeem $150 million senior notes due 2028, saving $26 million annually in interest. This debt reduction brings total retired debt to $265 million since July 2026 for the renewable fuels manufacturer.

Calumet to Redeem $150 Million of 9.75% Senior Notes Due 2028

IndexBox

Calumet to redeem $150 million of senior notes due 2028

Investing.com

Calumet to Redeem $150 Million Senior Notes Due 2028

Investing.com India

2026-03-30

Adams Asset Advisors LLC Holds $102.46M Stake in Calumet, Inc.

2026-03-30

Calumet (NASDAQ:CLMT) Given New $60.00 Price Target at HC Wainwright

2026-03-31

H.C. Wainwright Raises Calumet Stock Price Target to $60 from $33