Since then yields have declined and the conversion premium has risen to 25 percent.

The company said it expected to announce the exact interest rate and conversion premium by Sept. 1.

That is a hefty conversion premium of more than 50 percent from Time Warner's current price.

The conversion premiums which exist to enable tobacco growers to grow other crops must be encouraged and given a larger budget.

Moreover, there is a little-known wrinkle in the conversion process called a conversion premium.

Berkshire is offering a lower conversion premium, which is good for the buyer, while demanding in return an effective negative interest rate.

The notes are convertible into common stock at a price of $47.375 a share - the highest conversion premium ever for a zero-coupon convertible.

Busted convertibles are riskier bonds with double-digit yields and steep conversion premiums.

"Our combination of a 1 percent yield and a 47.5 percent conversion premium is the best any issuer ever achieved," he exulted last night.

SunAmerica, 3 million depository shares, each representing 1/50 series D mandatory conversion premium dividend preferred share.

Some people claim that these conversion premiums are of no help because tobacco is the only crop which can be grown where tobacco is currently grown.

Bond investors argue that they are deprived in these and many other corporate transactions of something of value - a conversion premium, a reasonable credit rating - without compensation.

"So USAir essentially did a deal with the same coupon and with a conversion premium three times what Delta was able to get," Mr. Pettee.

In the case of Salomon - as was true of the other three companies - Buffett obtained a relatively low conversion premium, though it would increase as the market dipped.

Mr. Buffett was able to secure the unusually low cost of capital by attaching the conversion premium, which provides an initial conversion price of $9,815 for each Berkshire share.

Andrew Wallach, a media analyst at Drexel Burnham Lambert Inc., said: "There will be more shares outstanding, but they will be issued at a high conversion premium.

When Mr. Swab crunched the data for a promising commercial real estate company, for instance, he found a 65 percent conversion premium; a yield difference of under 2 percent, and an 11-year break-even period.

Perversely, the lower the yield on the bidder's shares, the easier it is for the bidder to create a higher conversion premium on the convertible, with consequent benefits for the mathematics of the takeover.

HYMAN DUDAKOFF, Brooklyn A The break-even period refers to the time required for the convertible's current yield advantage to recapture the conversion premium.

Omit regulation 5 of the Dairy Herd Conversion Premium Regulations 1973 (power of authorised officer to enter land to inspect livestock in respect of which a premium has been applied for etc.).

The higher the premium redemption price, (1) the more the shares have to travel for conversion to take place before the maturity date, and (2) the lower the conversion premium has to be at issue to ensure that the conversion rights are credible.

Sales of thinly traded issues can be difficult and costly, while the conversion premium - the percentage by which a bond's market price exceeds the value of the convertible if it were exchanged for common stock -can disappear if the bond is called in while the market is rising.

Lam Research Corp issued $60m of 6.00% convertible subordinated debentures due May 1 2003, increased from the previously announced $50m and the debentures are convertible into the common stock of the semiconductor capital equipment maker at $37.50, which represents a 26.6% conversion premium over the closing bid on May 4.