Reverse convertibles are bonds that have fixed interest, the coupon, whose success is coupled to the price development of an underlying share. Although this product is also called an equity-linked bond, it actually deals with an investment in shares – albeit with reduced risks and less chance for profit. The base value of a reverse convertible is a share or an index.

The principle behind the share-backed bond: Instead of paying out the bond at its nominal value, the issuer has the right to deliver instead a previously fixed number of the underlying shares. The issuer would decide to deliver the shares when their value is less than the nominal value of the mature bond.