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English to French translations [Non-PRO] Finance (general)
English term or phrase:Loan Stocks
A loan stock is a type of fixed income security, a loan that is made to a company. Although the term loan stock might suggest otherwise, the holder of a fixed income security is merely the company’s creditor and does not have any say in their business. There are two types of fixed income security: loan stock and debenture. loan stock is stock granted in exchange for a loan. There are two basic kinds of loan stock:
A) The first kind, unsecured loan stock, basically means that the company receiving the loan offers no collateral to guarantee that the loan will be paid. In other words, if the company defaults on the loan, the creditor has no right to the company’s property as repayment. Unsecured loan stock is therefore very much like the unsecured loans individuals can get.
B) The second kind of loan stock is called convertible loan stock. It is a secured loan stock. Convertible loan stock offers the company a low, fixed interest rate. The creditor benefits by having the ability to convert the loan stock into actual shares in the company. The loan contract sets forth specific terms and a time frame for conversion of the loan stock.