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Burned by bond-like returns with stock-like risk

Reuters Breakingviews delivers agenda-setting financial insight. Its global correspondents react to stories as they develop, delivering sharp and provocative commentary on big financial news as it breaks.

Who wants equity-like risk for a debt-like return? Investors in bust Chinese solar panel maker Suntech got something close when they bought $575-million (U.S.) of convertible bonds back in 2008. Even though the bonds remain unconverted, the company’s bankruptcy could leave them with pennies – little better off than regular shareholders. Yet the lessons appear to be going unheeded.