An overhanging issue is a convertible security that cannot be forced into conversion by using the call feature.

Question

Quizplus · Accepted Answer

An overhanging issue is a convertible security that cannot be forced into conversion by using the call feature. The call feature allows the issuer of a convertible security to force the conversion of the security before maturity if the underlying stock price reaches a certain level. However, an overhanging issue typically contains a provision that prevents the call feature from being used to force conversion, allowing investors to hold onto the security for a longer period of time.

An Overhanging Issue Is a Convertible Security That Cannot Be