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Systematic risk changes around convertible debt offerings: A note on recent evidence

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  • Kleidt, Benjamin
  • Schiereck, Dirk

Abstract

We document a significant increase in systematic equity risk after a firm has issued convertible debt. In contrast, no such increase can be detected for equity issuers when infrequent trading and price adjustment delays are controlled for. The evidence is consistent with the notion that convertible debt issuers may be rationed out of the equity market due to uncertainty about their systematic risk.

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  • Kleidt, Benjamin & Schiereck, Dirk, 2009. "Systematic risk changes around convertible debt offerings: A note on recent evidence," Global Finance Journal, Elsevier, vol. 20(1), pages 98-105.
    • Handle: RePEc:eee:glofin:v:20:y:2009:i:1:p:98-105
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    References listed on IDEAS

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    Cited by:

    1. Zeidler, Felix & Mietzner, Mark & Schiereck, Dirk, 2012. "Risk dynamics surrounding the issuance of convertible bonds," Journal of Corporate Finance, Elsevier, vol. 18(2), pages 273-290.
    2. Osama Wagdi & Yasmeen Tarek, 2019. "The impact of financial risk on systematic risks: international evidence," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 9(6), pages 1-11.
    3. Marc Berninger & Paul Bossong & Dirk Schiereck & Marcel Steinhardt, 2023. "Too transparent for signalling? A global analysis of bond issues by property companies," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(3), pages 3125-3145, September.

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