Novel securities, supporting systems and methods thereof
A novel financial instrument, equity dilution inhibitor and security upgrade account are disclosed based on an enhanced callspread option. Implementation of the novel investment vehicle and/or upgrade account are managed via program controlled data processor governing system operation in accordance with investment parameters. Enhanced flexibility for this investment vehicle increases its usefulness to a broad spectrum of potential investors.
1 - 13 . (canceled)
14 . A computer implemented system implemented by an investment administrator and/or broker/dealer, comprising:
software stored on said system configured to create and manage an arrangement with an investor of an asset-linked convertible security having associated therewith an original conversion price for an asset linked to said asset-linked convertible security; and
software stored on said system configured to create and manage a payment stream extending for a select period into the future, said arrangement comprising a reversible swap for said payment stream in exchange for a lower effective conversion price.
15 . The system of claim 14 wherein said asset is equity.
16 . The system of claim 14 wherein said security is a debt instrument.
17 . The method of claim 14 , wherein payments in said payment stream may be stopped by said investor at any time without penalty, with the effect being a reversion to said original conversion price.
18 . The system of claim 16 wherein said payment stream comprises coupon payments for said debt instrument.
19 . The system of claim 15 wherein said lower effective conversion price is accomplished by a callspread option on said equity.
20 . A computer implemented method comprising:
electronically receiving securities related data;
based on said securities related data, electronically identifying a new issue;
electronically receiving data related to said new issue, wherein said data related to said new issue comprises underlying equity data and dilution parameters;
electronically calculating callspread terms based on said data related to said new issue;
electronically calculating installment terms based on said data related to said new issue and said callspread terms; and
electronically storing said callspread terms and installment terms.
21 . The method of claim 20 , further comprising:
electronically retrieving stored callspread terms and prior environment parameters;
electronically receiving current environment parameters;
electronically calculating hedge data based on said callspread terms and environment parameters; and
electronically storing said hedge data.
22 . The method of claim 21 , further comprising electronically adjusting said hedge data.
23 . A financial instrument comprising:
a debt security providing a fixed income return to a purchaser for a pre-set period of time that further provides to said purchaser an equity conversion arrangement for a select underlying equity security based on future contingent events; and
a derivative instrument coupled to said debt security by providing an option to an issuer of said debt security to purchase shares of said equity security at a select price at a future date, wherein said derivative instrument may be canceled by said issuer prior to said future date and payment for said derivative instrument is provided on an installment basis, with future payment obligations of said issuer extinguished upon cancellation with no penalty to said issuer for said cancellation.
24 . The instrument of claim 23 wherein said debt security is a convertible bond.
25 . The instrument of claim 23 wherein said derivative instrument is a callspread option having a strike price equal to a conversion price of said convertible bond.