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To Call Of Not To Call Convertible Debt, Louis H. Ederington, Gary L. Caton, Cynthia J. Campbell
To Call Of Not To Call Convertible Debt, Louis H. Ederington, Gary L. Caton, Cynthia J. Campbell
Cynthia J. Campbell
This paper tests various theories of the decision on when to call in-the-money convertible bonds by following newly issued convertible bonds over the first ten years of their life and relating the decision to call or not call at each point to the determining characteristics implied by each theory. Our results support the yield advantage and after-tax cash flow hypotheses, as well as a variant of the safety premium hypothesis. We find no evidence to support the signaling hypothesis, and no evidence that the desire to extinguish the bondholder's option is an important element in the call decision.
Private Security Placements And Resales To The Public Under Sec Rule 144, Cynthia J. Campbell
Private Security Placements And Resales To The Public Under Sec Rule 144, Cynthia J. Campbell
Cynthia J. Campbell
This article summarizes the reasons for the popularity of using the private placement market to raise capital, and describes the composition of the private placement market in terms of the types of securities issued and the dollar amounts raised. The typical security issued is debt for an average and median amount of $51 and $24, respectively. Common equity issues are also small, with average and median amounts of $53 and $17, respectively. A description covers the types of securities actually resold into the public financial markets. Predominantly only common equity is resold to the public and the majority of that …