Memorias de investigación
Communications at congresses:
Mandatory Convertible Bonds as an Efficient Method of Issuing Capital
Year:2017
Research Areas
  • Economy,
  • Company,
  • Finance
Information
Abstract
Mandatory Convertibles Notes (MCNs) mean only a small fraction of all the securities issued by corporate or financial institutions, however, they represent nearly a 30% in volume of the convertible securities issued every year. MCNs share characteristics of equity and debt securities but rating agencies assign them a high equity component and are commonly treated as equity by accounting standards. Despite the high facial coupon that MCNs seem to pay, a deeper analysis shows that the cost of MCN can be lower than the cost of issuing hybrid or subordinated debt and in some cases similar to the cost of issuing senior debt. Mandatory convertibles were profusely issued by financial institutions amid the global crisis as a means to increase capital and could be considered as a predecesor of some types of AT1 and Contingent Convertible. The academic literature about Mandatory Convertibles is scarce and we consider necessary to shed some light on a type of security that can be very useful for the real economy Keywords:
International
Si
Congress
11th International Conference on Industrial Engineering and Operations Management
960
Place
Valencia, España
Reviewers
Si
ISBN/ISSN
978-84-697-7199-0
Start Date
05/07/2017
End Date
06/07/2017
From page
1
To page
8
CIO 2017 PROCEEDINGS
Participants
Research Group, Departaments and Institutes related
  • Creador: Grupo de Investigación: Ingeniería de la Calidad Alimentaria
  • Departamento: Ingeniería de Organización, Administración de Empresas y Estadística