So as I understand it, investors want priority over equity holders in the event of a liquidation, but without the regulation and potential tax headaches of debt

So as I understand it, investors want priority over equity holders in the event of a liquidation, but without the regulation and potential tax headaches of debt. Since [convert] = [bond] + [option] what we do is make [bond] pay no coupon, and strike the option weirdly and make it look like it is a new (disruptive?) form of investment, when really it's tax/regulatory arb. Caveat: I am not a lawyer or banker, nor have actually read the documents, though I did read the OP.