Abstract
While depository receipts have attracted much scholarly attention, there is little research on the consequences of issuing foreign currency convertible bonds that account for a large fraction of issuance in global capital markets. We bridge this gap by examining FCCB issuance by Indian firms amounting to $22 billion during 2000-2017. We find that FCCBs could be delayed equity or cheap debt or relax capital constraints. However, issuers experience an increase in default probabilities, a rating downgrade and a deterioration in operating and stock performance. In line with this analysis, stock markets react negatively to the issuance of offshore convertibles.
Original language | English |
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Publication date | 2021 |
Number of pages | 52 |
Publication status | Published - 2021 |
Event | 12th Emerging Markets Conference. EMC 2021 - Sofitel Mumbai BKC + Video Conference, Mumbai, India Duration: 13 Dec 2021 → 15 Dec 2021 Conference number: 12 https://emergingmarketsconference.org/ |
Conference
Conference | 12th Emerging Markets Conference. EMC 2021 |
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Number | 12 |
Location | Sofitel Mumbai BKC + Video Conference |
Country/Territory | India |
City | Mumbai |
Period | 13/12/2021 → 15/12/2021 |
Internet address |
Keywords
- Financing policy
- Event studies
- International financial markets