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I think if I gathered that line correctly that this is a form of convertible debt(How's that for a new term for you?) where the holder of the LYON has a right to buy the stock at some strike price or hold the note and collect interest at a rate of 2.75% since there are no coupons the bond is discounted to give a yield, eg if you pay $1000 for an $1100 bond with no coupon that has a 10% yield when the bond matures.

JB
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