This paper analyzes convertible arbitrage, one of the most successful hedge fund strategies. The aim of the strategy is to exploit underpricing of convertible bonds by taking a long position in a convertible and a short position in the underlying asset. We find that convertible bonds are...

We study the announcement effects and their determinants of convertible debt issues in the Canadian market in order to identify issuer motives. The average wealth effect for the three-day event window around the announcement of convertible bonds between 1991 and 2004 is a significantly negative...

The literature on the motives for the issuance of convertible debt is reviewed. This literature shows a large discrepancy between theory and practice. Surveys show that managers base their motives for the use of convertible debt on factors that are irrational according to the theoretical...

We study the interaction between market timing and pecking order in the financing decision of firms. Using a sample of debt and equity issues and share repurchases of Canadian firms during 1998-2007, we find that only when firms are not financially constrained, they are more likely to issue...

This article reports the current practices of risk management in Slovenian companies and relates the incentives for risk management in the country's post-transitional legal and business environment to the neoclassical theoretical motives for risk management. We find that in such an environment,...

In this paper we investigate the short-term credit spread dynamics of quality US corporate bonds, building on the Longstaff and Schwartz (1995) two-factor model. We find that changes in credit spreads usually display a significant negative relationship with changes in both the risk-free short...