Convertible bonds are issued by the target company. At this time, investors can acquire and receive convertible bonds, becoming bondholders. These bonds can then work in a few different ways.
In the beginning, the convertible bonds operate much like traditional bonds. They have a tenure and an interest rate according to which the issuing company makes interest payments to bondholders.
As the bonds are convertible, they can be converted into shares during the bond's lifetime.
There are certain scenarios on the conversion you can see in your convertible bond terms.
You can find details to this investing type here.