Arbitrage vs. informed short selling: Evidence from convertible bond issuers

Hackney, John; Henry, Tyler R.; Koski, Jennifer L.

doi:10.1016/j.jcorpfin.2020.101687

Cited by 3 publications

(2 citation statements)

References 66 publications

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“…Dann and Mikkelson [13] analyze 132 CBs issued by 124 firms in US market and show that significant negative cumulative return after the issuance announcement. Following literatures [2,[14][15][16][17][18][19][20][21][22][23][24]] also report similar negative announcement effect of CB offerings. Ammann et al [25] find evidence that the announcement effects of CBs and EBs (exchangeable bonds) are negative and significant in Germany and Switzerland.…”

Section: Introductionmentioning

confidence: 56%

Announcement Effects of Convertible and Warrant Bond Issues with Embedded Refixing Option: Evidence from Korea

Kim¹

2020

Sustainability

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This study examines the announcement effects of convertible and warrant bond issues with embedded refixing option in Korea from January 2001 to December 2018. Refixing option denotes an adjustment right of the conversion price embedded in equity-linked debt when the underlying stock price falls under conversion price. I find statistically significant declines of 2.6 to 2.7 percentage points in cumulative abnormal returns for the inclusion of a refixing clause and especially further declines of 6.2 to 6.3 percentage points during the period from 2016 to 2018. This result implies that the market’s concerns about the dilution of existing shareholder value due to the exercise of the refixing rights are reflected in the market response. I further find that the degree of negative market response varies according to the changes in macroeconomic conditions and the stock exchange on which the issuing firms are listed. The findings are robust after controlling for the effect of firm-, issue-, and market-specific characteristics.

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Section: Introductionmentioning

confidence: 56%

Announcement Effects of Convertible and Warrant Bond Issues with Embedded Refixing Option: Evidence from Korea

Kim¹

2020

Sustainability

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“…Cependant,Lewis et al (2001) affirment que les émissions d'OC envoient des signaux négatifs pour la structure financière des firmes : la piètre performance de l'obligation cotée représenterait un frein à une future augmentation de capital. Les facteurs macro-économiques permettent également d'expliquer le cadre favorable ou non du choix des OC tant du côté émetteur que du côté investisseur(De Jong et al, 2013 ;Tyler et al, 2020).1.2. La classification comptable des titres hybrides« Le critère permettant de distinguer dettes et capitaux propres est l'existence ou non d'une obligation pour l'émetteur de verser un paiement en espèces à sa contrepartie.Le fait d'avoir ou non l'initiative du décaissement est le critère essentiel de distinction entre dettes et capitaux propres », (Klépierre, Document de référence 2018, p.71).…”

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Structure financière et recours aux titres hybrides : le cas des sociétés du SBF 120

Barneto¹,

Ouvrard²,

Rannou³

2022

Gestion 2000

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The purpose of this paper is to examine the financing of companies belonging to the SBF 120 index over the 2010-2018 period. The research question is whether the use of hybrid securities has an impact on the financial structure of groups under IFRS (International Financial Reporting Standards). Two categories of hybrid securities are used: those belonging to the TSDI family (Subordinated Notes with Indefinite Term) and those belonging to the CB family (Convertible Bonds). Our study highlights that: (i) only 53% of listed companies used a hybrid instrument over the period studied; (ii) there is a difference in the accounting classification of these instruments in 25% of cases, between the consolidated financial statements disclosed under IFRS and the parent company's stand-alone financial statements published under French GAAP; (iii) the overall amount of hybrid securities issued is too small to reveal an impact on financial structures and on the accounting classification by issuers.

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Convertible Bond Arbitrage Smart Beta

Zeitsch

2022

Comput Econ

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Arbitrage vs. informed short selling: Evidence from convertible bond issuers

Cited by 3 publications

References 66 publications

Announcement Effects of Convertible and Warrant Bond Issues with Embedded Refixing Option: Evidence from Korea

Announcement Effects of Convertible and Warrant Bond Issues with Embedded Refixing Option: Evidence from Korea

Structure financière et recours aux titres hybrides : le cas des sociétés du SBF 120

Convertible Bond Arbitrage Smart Beta

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