search query: @indexterm financial innovation / total: 190
reference: 4 / 190
| Author: | Hillion, P. Vermaelen, T. |
| Title: | Death spiral convertibles |
| Journal: | Journal of Financial Economics
2004 : FEB, VOL. 71:2, p. 381-415 |
| Index terms: | Capital structure of companies Convertible bonds Financial innovation |
| Language: | eng |
| Abstract: | Floating-priced convertibles, known as death spirals, are privately held convertible securities with a conversion price set at a discount from the average of past stock prices in a look-back period. The issuance of floating-priced convertibles is followed by significant negative abnormal returns. The results are consistent with the faulty contract hypothesis that argues that the contract design encourages short-selling by the convertible holders and other professional short sellers. |
SCIMA