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Sweetener

• Is an added incentive to purchase a security. One example of this would be the coupling of warrants with a convertible bond issue. Here, the warrants would be viewed as the sweetener.

 
 Embedded terms in definition
 Bond
Convertible bond
Convertible
Issue
Purchase
Security
 
 Referenced Terms
 Warrant: A warrant is similar to an option, giving the holder the right to purchase securities at a set price for a specific period of time. Warrant certificates last longer than options, typically holding value for a few years or indefinitely. Warrants are often traded as securities at a price that reflects the underlying security.A financial instrument that gives its holder the right to purchase a certain number o common shares at a specified price within a certain period of time.A security that gives the holder the right to purchase securities from the issuer of the warrant at a stipulated subscription price. Warrants are usually long-term instruments, with expiration dates years in the future.A security entitling the holder to buy a proportionate amount of stock at some specified future date at a specified price, usually one higher than current market. This warrant is then traded as a security, the price of which reflects the value of the underlying stock. Warrants are issued by corporations and often used as a Sweetener bundled with another class of security to enhance the marketability of the latter. Warrants are like call options, but with much longer time spans --sometimes years. In addition, warrants are offered by corporations whereas exchange traded call options are not issued by firms.Is used differently by the securities and commodities industries. In the securities industry, it refers to a derivative instrument which has an expiration date and strike price and other exercise conditions. In the commodities industry, it refers to a receipt indicating ownership of a specific lot of a commodity.

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