The bonds will have a face value of $100, will pay a coupon of 9% per annum, payable quarterly in arrears and have a maturity date of 15th May 2018.
The options will be issued to the initial investors under the bond issue in the ratio of one option for every $2.00 of bonds subscribed for by those investors, and will have a four year term and an exercise price of $1.30.
My understanding is that they'll get their capital back in full in 2 months, plus they've already got their 9% PA for 4 years paid quarterly, and they were able to do what they liked with the options for the past 4 years - sell, hold, convert.
I bought my options for $0.40 a couple of years ago (I over-payed a bit, but it still turned out ok). I probably bought them from a bond-holder. If the bond holder invested $2 and got 1 bonus option which they sold to me for $0.40, that was the bonus on top of the 9% coupon PA.
MNY was around $1.10 share price when the bonds were issued, so the $1.30 conversion price meant they only got a bonus if the SP rose.
I paid $1.30 (or so) to convert my options, and the bond holder would have had to do the same, had they converted instead of sold them to me.
