redemption at par , auch: redemption at the nominal value

If the terms of redemption merely provided for their redemption at par, their holders would be highly vulnerable; for if interest rates fell since the date of issue it would clearly pay the company to redeem them and to borrow money at a lower rate of interest than the fixed dividend.

This type is the most common convertible type and is typically providing the asymmetric returns profile and positive convexity often wrongly associated to the entire asset class: at maturity the holder would indeed either convert into shares or request the redemption at par depending on whether or not the stock price is above the conversion price.