Convertible loan

A convertible loan is debt that the lender can convert into equity of the borrower at a set conversion price, blending a fixed coupon with an equity upside. In shipping it appears in restructurings and in growth financing for listed owners, where a bank or fund accepts a lower cash interest rate in exchange for the option to take shares if the company recovers. The note specifies the conversion ratio, the trigger events, and any forced-conversion or call rights. For the owner it defers dilution and lowers cash debt service; for the holder it caps downside as debt while keeping the equity option.