La performance boursière à long terme des émetteursd'obligations convertibles:Cas du marché français (1990-2001)

Khalid Elbadraoui
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Khalid Elbadraoui: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper investigates empirically the effect on the long-term stock price performance of the convertible bonds issuance decision in France. Our sample consists of 92 public convertible bonds offerings made by 87 operating firms during the period 1990-2001.After corroborating the significantly short-run price adjustment around convertible bonds offeringannouncements, widely documented in numerous studies in French market, we demonstrate, using different methodologies and benchmarks, that issuing firms experience a substantial decrease in stock profitability from the month of issue to their three-year anniversaries. This evidence leads us to consider convertible bonds issuance as an under-reaction event.Our evidence is not consistent with the market-timing hypothesis of convertible bonds issuance, in which investors are periodically overoptimistic about the long-term prospects of the issuers and managers take advantage of this window of opportunity.Our study also focuses on the cross-sectional differences in the long-run abnormal returns of convertible bonds issuers in order to uncover factors affecting the level of the firm stock price performance after the offering.

Keywords: Convertible bonds offerings; Long-term stock price performance; Abnormal returns; Underperformance; Under-reaction; Over-performance; Over-reaction.; Emissions d'obligations convertibles; Performance boursière à long terme; Sur-réaction; Rendements anormaux; Sous-performance; Sous-réaction; Sur-performance; Sur-réaction. (search for similar items in EconPapers)
Date: 2006-06-26
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Published in Actes du congrès international de l'AFFI "Finance d'entreprise et finance de marché: quelles complémentarités ?", Jun 2006, pp.32

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