Abstract
We examine the impact of fluctuations in investor demand for convertible securities on convertible bond issue volumes, pricing, and design. We find evidence of a positive impact of investor demand proxies on convertible bond issue volumes. We also document significantly lower convertible bond underpricing in periods with higher investor demand. The results hold in a variety of specifications, and are robust to controlling for firm-specific and macroeconomic financing cost proxies. However, we obtain only limited evidence that issuers adjust the design of their convertible bond offerings in response to investor demand.
Original language | English |
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Pages (from-to) | 41-78 |
Number of pages | 38 |
Journal | Financial Management - FM |
Volume | 42 |
Issue number | 1 |
DOIs | |
Publication status | Published - 2013 |