Timing of convertible debt issues

    Authors

    S. V. Mann; W. T. Moore;P. Ramanlal

    Comments

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    Abbreviated Journal Title

    J. Bus. Res.

    Keywords

    Business

    Abstract

    The popularity of convertible debt as a financing vehicle waxes and wanes. In this article, we investigate whether the timing of convertible debt issues can be explained by three reported reasons for its use as a financing vehicle. Specifically, we reexamine the long-standing beliefs that convertibles are wed as "debt sweeteners" and there are "hot issue" markets for these securities. In addition, we examine whether convertibles help diminish the agency conflict between bondholders and stockholders as suggested by Brennan and Schwartz (1988). Our empirical results suggest that. (1) corporate managers issue convertible debt as debt sweeteners and (2) more convertible debt is issued in hot markets. (C) 1999 Elsevier Science Inc. All rights reserved.

    Journal Title

    Journal of Business Research

    Volume

    45

    Issue/Number

    1

    Publication Date

    1-1-1999

    Document Type

    Article

    Language

    English

    First Page

    101

    Last Page

    105

    WOS Identifier

    WOS:000080163400009

    ISSN

    0148-2963

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