How much does a valuation of convertible bonds and option rights cost? Prices and fees 2026 (Switzerland)

Introduction: how much does a valuation of convertible bonds and option rights cost in Switzerland in 2026?

How much should you budget to have a convertible bond or an option right valued in Switzerland? The answer depends less on the amount raised than on the legal basis: a single instrument generally falls between CHF 3,000 and 10,000, and a structure combining several instruments between CHF 6,000 and 12,000 (Hectelion practice, 2026).

A convertible bond is a bond loan that its creditor may exchange for new shares, under the issue terms set by the Swiss Code of Obligations (art. 653 CO, Fedlex). An option right attached to a share follows the same framework, and its validity depends on compliant articles of association.

"The general meeting may decide to create conditional capital by granting shareholders, creditors of bonds or similar obligations, employees, members of the board of directors of the company or of another group company, or third parties, the right to acquire new shares (conversion and option rights).", Code of Obligations, art. 653 para. 1 (unofficial translation by Hectelion).

Three factors make this topic central in 2026. Mezzanine structures combining convertible bonds and option rights are growing in LBOs of mid-sized companies. Each instrument must rest on compliant articles of association, failing which the conversion or option right is void. And the issue price must be justified in light of the shareholders' pre-emptive right.

This article sets out the definition and origin of these instruments, explains why and how they are valued, specifies when to use them and whom to entrust the engagement to, then details the advantages, limits and common mistakes. It illustrates the points with two worked cases and answers the ten most frequent questions.

Secure your valuation of convertible and option instruments before you commit

Thirty minutes are enough to define the scope of your instruments and the corresponding budget. Hectelion carries out financial instrument valuation engagements for Swiss companies, alone or alongside your auditor. Book a free, confidential call: we qualify the number of instruments, the applicable legal basis and the timetable before any commitment.

Acontos: estimate the value of your company online, free of charge

Before going into detail, you should know that Hectelion has developed Acontos, an online audit, due diligence and business valuation tool, powered by Anthropic's Claude Sonnet 5 artificial intelligence and calibrated on Hectelion's methodology. From your accounts, it produces within minutes a first estimate of the value of your shares, free of charge and without keeping any document. Run the valuation simulator to obtain an order of magnitude, then read on to understand what drives it.

Definition: what are a convertible bond, a bond with an option right and an option right attached to a share?

Under Swiss law, conversion and option rights are granted to creditors of bond loans and to third parties, and are served by conditional capital (Code of Obligations, art. 653 to 653c). Three instruments follow from this, defined below.

A convertible bond is a bond loan that its creditor may, or must depending on the issue terms, exchange for new shares. A bond with an option right is a bond loan carrying a right to acquire new shares at a fixed price: unlike conversion, the debt claim survives.

An option right attached to a share is the right to acquire new shares at a fixed price, linked to an ordinary share. Its validity depends on the conditional capital provided for by the Code of Obligations, which is a capital that increases only to the extent that conversion or option rights are exercised (CO art. 653 para. 2).

The pre-emptive subscription right is the right of shareholders to subscribe in priority to an issue, in proportion to their holding. For bonds linked to conversion or option rights, the rule is set out in CO art. 653c para. 2. Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants (IFRS 13). Volatility measures the amplitude of changes in the share price; it is the central parameter of option models.

Swiss law does not use the French terms ORA, OBSA or ABSA. It organises the same economic needs with its own categories: convertible bonds, bonds linked to option rights and conditional capital. The table below gives the economic correspondence, which is not a legal equivalence. A French clause cannot be transposed as it stands into Swiss law without checking the articles of association, the issue agreement and the shareholders' agreement. The differences between France and Switzerland in valuation are covered in a separate publication.

Origin: a Code of Obligations rule from 1991, reformed in 2023

Conversion and option rights have been in the Code of Obligations since the revision of 4 October 1991, in force from 1 July 1992, which introduced conditional capital and its rules (articles 653 to 653c). The framework aimed to allow public limited companies to issue convertible bonds or bonds with options without an immediate capital increase.

The revision of company law adopted on 19 June 2020 amended these provisions, in force from 1 January 2023. It notably clarified the content of the articles of association (article 653b) and the pre-emptive subscription rights (article 653c). Fedlex indicates that a further amendment of articles 653 to 653c is scheduled for 1 July 2027, so the version applicable on the date of issue must be checked for each engagement.

Why value a convertible bond or an option right: five reasons

Firstly, the valuation separates the debt claim from the option. A convertible bond combines a debt and a conversion right; without a valuation, it is impossible to split the value correctly between debt and equity in the accounts.

Secondly, the valuation documents the issue price. Swiss law requires that shares be issued only at par or above (CO art. 624 para. 1). Where the issue is not made in preference to shareholders, the articles must set the basis for calculating the issue price (CO art. 653b para. 2). A reasoned value is how these two points are demonstrated.

Thirdly, it protects against challenge. The suppression or limitation of the pre-emptive right must not unduly advantage or disadvantage anyone (CO art. 653c para. 4). A report that addresses this point reduces the risk of a challenge by a minority shareholder.

Fourthly, it informs the negotiation. A mezzanine lender or a shareholder fund that knows the value of the option component can better arbitrate the coupon, the conversion price and future dilution.

Fifthly, it secures the closing. When an LBO or a transfer depends on a hybrid financing, a documented value avoids delays caused by a late review by the auditor or the bank.

How a valuation is built: legal basis, model, breakdown

The method starts with verifying the legal basis. Before any modelling, the amount of the conditional capital must be checked: it may not exceed half of the share capital registered in the commercial register (CO art. 653a para. 1). The mandatory statements of the articles (CO art. 653b para. 1) must be present and, where the issue is not made in preference to shareholders, the conditions of exercise and the basis for the issue price must be set (CO art. 653b para. 2). An option whose statutory basis is missing is void (CO art. 653b para. 3).

The choice of model comes next. For a European option on a listed asset, the Black-Scholes-Merton formula is the closed-form reference. Employee options and early conversions require adjustments, in particular for dilution, early exercise and the probability of vesting, as Damodaran notes. A clause depending on the path, such as mandatory conversion or early redemption, leads in practice to a binomial model, or even a Monte Carlo simulation. Our practice on these models is set out in our publication on the BSPCE and the management package.

The third step breaks the instrument down. For a bond with an option right, the debt claim is discounted at a rate reflecting the issuer's own credit risk, and the option is valued separately. This breakdown is essential for accounting and for negotiation.

The fourth step checks the results against the pre-emptive right and the issue price. The fifth step is the report, which presents the verified legal basis, the model, the volatility and rate assumptions, and the sensitivity of the results. The price ranges below reflect the complexity of each case.

Ranges observed by Hectelion in 2026 for engagements in Switzerland, excluding any additional financial due diligence. The number of instruments combined in a single transaction, more than the size of the company alone, drives most of the price difference.

When to use a convertible bond or an option right

A convertible bond is used when a shareholder wants to strengthen the equity of a company without immediate dilution, in an LBO or a transfer financed by a shareholder. Conversion is then deferred, and its value depends on the conversion price, the maturity and the volatility of the share.

A bond with an option right suits a mezzanine lender who wants the protection of a debt claim and an optional participation in the increase in value. The option right attached to a share serves to align a minority investor or a manager on a future increase in value, without immediate acquisition of the shares. In an LBO or transfer financing with several lenders or investors, the instruments combine and financial structuring organises the whole.

Who to engage: three criteria for choosing your valuer

Firstly, independence. Check who pays the provider and since when they have worked with the fund, the lender or the shareholders involved. A report produced by someone linked to one of the parties loses part of its probative force before an auditor.

Secondly, mastery of hybrid instruments. The provider must know how to split a bond with an option right into its bond component and its option component, and choose the model suited to the clause. A single model applied to every instrument is a warning sign.

Thirdly, verification of Swiss law. The provider must check the articles of association, the conditional capital and the pre-emptive right before modelling, not after. Hectelion, an independent Franco-Swiss boutique firm, applies this verification before each engagement, following the standards of the International Valuation Standards Council (IVSC). Listed transactions fall to other professionals, outside this scope.

Advantages: legal certainty, clear breakdown, informed negotiation

A documented valuation first offers legal certainty. Verifying the legal basis upfront prevents a void right from being valued and negotiated, and the report serves as evidence before an auditor or an authority.

It then provides a clear breakdown. Separating the debt claim from the option, and then the debt from equity, allows consistent accounting and a precise reading of future dilution, which helps the discussion between shareholders and lenders.

Finally, it improves the negotiation. The parties know the value of each component before fixing the coupon, the conversion price or the exercise threshold, which reduces back-and-forth and shortens the closing.

Limits: dependence on the articles, sensitivity to assumptions, cost of complexity

The first limit is dependence on the articles of association. A fair value on paper is worthless if the conditional capital or the mandatory statements are missing: legal verification necessarily comes first, and it may reveal corrections to make before the issue.

The second is sensitivity to assumptions. Volatility, the discount rate and the term weigh heavily on the result. A report must therefore present sensitivities rather than a single figure, because a poorly justified assumption weakens the whole.

The third is the cost of complexity. A structure combining several instruments, ratchet clauses or a Monte Carlo simulation lengthens the timetable and the budget. Grouping the instruments of one transaction and stabilising the terms before the engagement limits this effect, without reducing the depth of the analysis.

The 5 mistakes to avoid

Mistake 1: valuing a convertible bond as a plain bond

A convertible bond gives the right to new shares. Ignoring this right in the model leads to underestimating future dilution and overestimating the creditor's protection. The model must include the conversion, even when it lies far in the future.

Mistake 2: issuing an option right without compliant articles of association

Without conditional capital and the statements required by CO art. 653b, the option right is void. An instrument modelled on that basis has no legal value, and the error often only surfaces at the time of exercise.

Mistake 3: ignoring the pre-emptive right of shareholders

An issue of bonds linked to option rights, without a prior offer to shareholders and without a documented valid reason, exposes the company to challenge (CO art. 653c). The report must address this point and justify the issue price in light of that right.

Mistake 4: valuing a bond with an option right as a single block

Treating the bond and the option as one value prevents the split between debt and equity from being properly documented. This split is essential for accounting and for reading leverage ratios.

Mistake 5: underestimating the issuer's own credit risk in a mezzanine structure

Valuing a bond using only the risk-free rate, without adjusting the discount rate for the issuer's own credit risk, overstates the instrument and weakens the report before a lender or an auditor.

Case 1: convertible bond of a Swiss industrial SME, valued at CHF 5,500

Case constructed for illustration, based on observed market practice.

Company P SA, a manufacturer of industrial equipment in French-speaking Switzerland, employing around one hundred people. It issues a convertible bond with a nominal amount of CHF 4 million to an investor, with mandatory conversion at the five-year maturity.

The fee is CHF 5,500, within the range of CHF 3,000 to 10,000 for a single instrument, given a simple cap table and articles of association already compliant. The engagement verifies the conditional capital, models the mandatory conversion with a binomial model and documents the issue price in light of the pre-emptive right.

Case 2: mezzanine financing combining a convertible bond and an option right, valued at CHF 9,000

Case constructed for illustration, based on observed market practice.

Company M SA, a business services group in German-speaking Switzerland. An LBO fund structures the acquisition with a senior debt tranche, a convertible bond subscribed by the fund to strengthen equity, and a bond with an option right subscribed by a third-party mezzanine lender.

The fee is CHF 9,000, within the range of CHF 6,000 to 12,000 for a structure combining several instruments, because of the coordination between the shareholder fund and the mezzanine lender. The engagement first verifies the articles of association and the conditional capital, then applies a binomial model to the conversion and a bond and option breakdown to the bond with an option right, with a discount rate adjusted for the issuer's own credit risk.

Mot du dirigeant

"A convertible bond or a bond with an option right is too often treated as a simple debt. These are hybrid instruments, and the report must precisely separate what belongs to the debt from what belongs to the option.", Aristide Ruot, founder of Hectelion SA.

"Our role is to document defensible assumptions, not to produce a figure. It is this documentation, more than the figure itself, that protects the executive, the beneficiaries and the lenders in the event of an audit or a negotiation.", Aristide Ruot, founder of Hectelion SA.

Aristide Ruot, Ph.D.
Founder, Hectelion SA

FAQ: the 10 essential questions on the price of valuing convertible bonds and option rights in Switzerland

Introduction: what to remember before the questions

The ten questions below cover what founders, funds, banks and auditors most often ask before having a convertible bond or an option right valued in Switzerland. Each answer relies on the articles of the Code of Obligations or on valuation practice.

Q1: How much does a valuation of convertible bonds cost in Switzerland?

Between CHF 3,000 and 10,000 for a single instrument, and between CHF 6,000 and 12,000 for a structure combining several instruments in the same financing (Hectelion practice, 2026). The price rises with the number of instruments, the complexity of the clause and the number of report versions requested, more than with the size of the company.

Q2: What is the difference between a convertible bond and a bond with an option right?

In a convertible bond, the creditor exchanges its claim for shares and the debt disappears to the same extent. In a bond with an option right, the claim survives and the creditor may, in addition, acquire new shares at a fixed price. For the valuation, this changes everything: the first is valued as a convertible debt, the second is broken down into a claim and an option.

Q3: Is an option right attached to a share valid without conditional capital?

No. A conversion or option right granted before the statutory provisions introducing the conditional capital are entered in the commercial register is void (CO art. 653b para. 3). Checking the articles of association is therefore the first step of any valuation, before any calculation.

Q4: What is the ceiling on conditional capital in Switzerland?

The nominal amount of the conditional capital may not exceed half of the share capital registered in the commercial register (CO art. 653a para. 1). The contribution must at least equal the nominal value of the shares (CO art. 653a para. 2). This ceiling limits the issuing capacity and therefore the structures that are possible.

Q5: Must convertible bonds be offered to existing shareholders first?

In principle yes: bonds linked to conversion or option rights issued within conditional capital must be offered in priority to shareholders, in proportion to their holding (CO art. 653c para. 2). This right may be limited or suppressed for a valid reason, or where the shares are listed and the issue made on fair terms (CO art. 653c para. 3). The suppression must not unduly advantage or disadvantage anyone (CO art. 653c para. 4).

Q6: How is the value of a convertible bond calculated?

The value breaks down into two parts: the debt claim, discounted at a rate reflecting the issuer's own credit risk, and the conversion option, valued with an option model. For a standard conversion, a binomial model is sufficient. Volatility and the remaining term are the two parameters that weigh most on the result, and the report must show their sensitivity.

Q7: When is a Monte Carlo model needed rather than a binomial model?

The binomial model suffices for a conversion whose conditions depend only on the share price at a given date. The Monte Carlo model becomes necessary when the value depends on the path taken by the share price, for example with a conditional early redemption or an allocation between classes of shares. The choice of model is therefore driven by the clauses, not by the size of the transaction.

Q8: Must a convertible bond be revalued at each closing?

It depends on the applicable accounting framework: if the value must be tracked at each closing, the instrument is revalued every year. In all cases, an amendment changing the rate, the maturity or the conversion price requires a new valuation. This one-off revaluation is often more costly than the initial engagement, because it starts from a state of affairs already modified.

Q9: Who commissions the valuation of a convertible bond in an LBO?

The target company generally pays for the engagement. In a mezzanine financing, however, the shareholder fund or the mezzanine lender often imposes the provider, or at least a right to review the report. Check who pays the valuer and since when they have worked with the parties: this independence determines the weight of the report before an auditor.

Q10: How long does it take to have these instruments valued?

Two to four weeks for a single instrument, and three to six weeks for a structure combining several instruments. The timetable depends above all on the availability of the articles of association, the issue agreement and the shareholders' agreement, because legal verification comes before the calculation.

Estimate the value of your company with Acontos, Hectelion's online simulator

To go further with a concrete estimate, Hectelion offers Acontos, its online tool for audit, due diligence and business valuation. Powered by Anthropic's Claude Sonnet 5 artificial intelligence and calibrated on Hectelion's methodology, it reads your accounts, normalises EBITDA, applies real sector multiples and reconstructs a net debt bridge to estimate the value of your shares within minutes. Run the free valuation simulator: the tool is confidential, keeps no documents and does not replace a formal valuation, but gives a useful first order of magnitude before discussing with our team.

Conclusion: the price of a valuation depends on the legal basis and the number of combined instruments

The cost of an engagement on convertible bonds and option rights in Switzerland reflects the number of combined instruments, the valuation model required and the prior verification of the applicable law. For a single instrument, the range of CHF 3,000 to 10,000 covers most files; structures combining several instruments fall between CHF 6,000 and 12,000.

Comparing quotes means comparing identical models and verified legal bases, exactly as for any business valuation engagement.

Summary of the article

A valuation of convertible bonds or option rights in Switzerland costs between CHF 3,000 and 10,000 for a single instrument, and between CHF 6,000 and 12,000 for a structure combining several instruments.

Swiss law does not use the French terms ORA, OBSA and ABSA. It rests on the Code of Obligations: conditional capital (CO art. 653a and 653b), convertible bonds and bonds with option rights (CO art. 653), and the shareholders' pre-emptive right (CO art. 653c). The two worked cases illustrate this: CHF 5,500 for a convertible bond of an industrial SME, CHF 9,000 for a mezzanine financing of a Swiss LBO.

Hectelion carries out valuations of convertible bonds and option rights for Swiss companies, in full independence from funds and traditional financial intermediaries.

Sources

• Damodaran, Aswath, Employee Options, Restricted Stock and Value
• Fedlex, Code of Obligations, articles 653 to 653c on conditional capital, conversion and option rights and the pre-emptive right (official text in French)
• Fedlex, Federal Act on Banks (RS 952.0), reserved by CO art. 653 para. 4 (official text in French)
• Hectelion, BSPCE: understanding, structuring and valuing the management package
• IFRS Foundation, IFRS 13, Fair Value Measurement
• International Valuation Standards Council (IVSC), International Valuation Standards

Author

Aristide Ruot, Ph.D.
Founder | Chief Executive Officer, Hectelion SA