Debentures rank higher than preferred shares so can be considered safer if the company gets into trouble. Most are secured by all assets of the company but many are (legally) unsecured. PBH.DB.J are convertible debentures, so can be considered part debt/part equity. However, for now the conversion price is well above the stock price. Thus, the debentures will act like regular bonds until and/or if the stock moves higher to be closer to the conversion price. If the stock moves to the conversion price, the debentures will start trading more in line with the stock price. We are comfortable with PBH and the debentures, but we would note they are not guaranteed as GICs are. The market value will also fluctuate and can be sensitive to interest rates (unlike fixed-rate GICs). We would see them as one part of a fixed-income allocation, but in no way would we compare them directly with the safety of a GIC. The income is taxed as interest. They are 'safe' as long as PBH can produce cash flow in excess of its interest/repayment obligations. We would not expect issues but there could be if the company ran into serious financial trouble down the road. Note that in a crisis the company could pay off the debentures with stock issuance.
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