Why do Companies issue Convertible Bond Loans? An Empirical Analysis for the Canadian Market

I. Loncarski, J.R. Ter Horst, C.H. Veld

Research output: Working paperDiscussion paperOther research output

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Abstract

We examine the wealth effects associated with the announcements of convertible debt offerings in the Canadian market for the period between 1991 and 2004.The average wealth effect for the three day event window is a significantly negative -2.7%.This result is in line with previous studies on other Anglo-Saxon markets, but it is different from other markets where generally no effect or even a positive effect is found.In addition, support is found for the negative effect of both debt- and equity-related agency costs.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages41
Volume2006-65
Publication statusPublished - 2006

Publication series

NameCentER Discussion Paper
Volume2006-65

Fingerprint

Loans
Convertible bonds
Empirical analysis
Wealth effect
Convertible debt
Equity
Agency costs
Announcement
Debt

Keywords

  • Event study
  • convertible bonds
  • wealth effects
  • agency costs

Cite this

Loncarski, I., Ter Horst, J. R., & Veld, C. H. (2006). Why do Companies issue Convertible Bond Loans? An Empirical Analysis for the Canadian Market. (CentER Discussion Paper; Vol. 2006-65). Tilburg: Finance.
Loncarski, I. ; Ter Horst, J.R. ; Veld, C.H. / Why do Companies issue Convertible Bond Loans? An Empirical Analysis for the Canadian Market. Tilburg : Finance, 2006. (CentER Discussion Paper).
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Loncarski, I, Ter Horst, JR & Veld, CH 2006 'Why do Companies issue Convertible Bond Loans? An Empirical Analysis for the Canadian Market' CentER Discussion Paper, vol. 2006-65, Finance, Tilburg.

Why do Companies issue Convertible Bond Loans? An Empirical Analysis for the Canadian Market. / Loncarski, I.; Ter Horst, J.R.; Veld, C.H.

Tilburg : Finance, 2006. (CentER Discussion Paper; Vol. 2006-65).

Research output: Working paperDiscussion paperOther research output

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KW - agency costs

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PB - Finance

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Loncarski I, Ter Horst JR, Veld CH. Why do Companies issue Convertible Bond Loans? An Empirical Analysis for the Canadian Market. Tilburg: Finance. 2006. (CentER Discussion Paper).