Why firms issue convertible debt has both intrigued and puzzled financial researchers. The convertible bonds are after all only a bundle of straight debt and call options on the issuer company’s stock. What special advantages do they provide that cannot be mimicked by a unit offering of straight bond debt and warrants? Yet the popularity of convertibles remains unabated and continues to challenge researchers to come up with reasonable explanations. A rich theoretical literature has also developed to explain rationales for convertible issuance but empirical evidence is mixed. The goal of this paper is to provide some insights into the link between theory and practice of convertible issuance through a survey of European managers.
Our survey complements and extends the literature in several aspects. First, most of the previous managerial surveys on convertible debt issuance have been undertaken in the U.S. which has a well-developed and mature convertible market. In contrast, the European convertible market gained momentum only in the mid-1990s but has grown rapidly since then. Further, European convertible bonds have several distinctive features not observed in the U.S. case. For example, in addition to issuing the standard convertible debt security, many European firms also issue exchangeable bonds where the options are written on securities of other firms. Also, many European convertibles are denominated in a currency other than that of the underlying equity. Further, convertible features, markets, and regulatory environments vary widely even across European countries providing us a rich data set to explore cross-country differences. The French market comprises about one third of the European market and is the fastest growing with a large base of private and institutional investors. In this study, we compare managerial perspectives of French versus other European firms to gain some insights into factors that may have spurred growth of the French convertible market.
What you choose to eat affects your chances of developing high blood pressure, or hypertension (the medical term). Recent studies show that blood pressure can be lowered by following the Dietary Approaches to Stop Hypertension (DASH) eating plan—and by eating less salt, also called sodium.
While each step alone lowers blood pressure, the combination of the eating plan and a reduced sodium intake gives the biggest benefit and may help prevent the development of high blood pressure.
This paper has three objectives. The first is to establish the circumstances under which independent monetary policy is warranted even where a country is a small, satellite economy connected to a large hub. This description fits virtually all the countries in Central America and the Caribbean where patterns of trade and factor movements are bound up and interwoven with developments in the US economy. Nevertheless, these countries have adopted different monetary and exchange rate regimes since 1971, some opting for a long term peg to the US dollar and others subsequently adopting floating regimes in order to pursue some monetary policy independence. The first part of the paper is devoted to a review of the options open to countries in the region and the broad consequences of the choices that they made.
