Issuer's perspective on the call right o To have the flexibility to call if they think they can refinance the debt more cheaply o To force bondholders to convert debt into equity which can reduce debt levels and result a beneficial effect on the balance sheet. The issuer has the flexibility to shift debt into equity to reduce the leverage of the firm. In summary, it is used as a tool by issuer for possible future equity financing managing the debt /equity balance Convertible bondsSlide: 10  To have the flexibility to call if they think they can refinance the debt more cheaply.  To force bondholders to convert debt into equity, which can reduce debt levels and result a beneficial effect on the balance sheet. The issuer has the flexibility to shift debt into equity to reduce the leverage of the firm. In summary, it is used as a tool by issuer for possible future equity financing – managing the debt / equity balance. Convertible bonds