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| Tekijä: | Jong, A. de Dutordoir, M. Verwijmeren, P. |
| Otsikko: | Why do convertible issuers simultaneously repurchase stock? An arbitrage-based explanation |
| Lehti: | Journal of Financial Economics
2011 : APR, VOL. 100:1, p. 113-129 |
| Asiasana: | stock repurchases short selling arbitrage debt companies USA |
| Kieli: | eng |
| Tiivistelmä: | This paper explores the motivations for U.S. convertible bond issues being combined with stock repurchases (hereafter as: st-rep/s.). It is argued that convertible (here as: cnvrt/s.) debt issuers do their s-rep/s. to ease arbitrage-related short selling (here as: s-slng.) It is shown that cnvrt/s. combined with a st-rep/s. are linked with lower offering discounts, lower stock price pressure, higher expected hedging demand, and lower issue-date s-slng. than uncombined issues. It is also found that cnvrt/s. arbitrage strategies explain both the size and the speed of the st-rep/s. execution. |
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