Rola opcji call w obligacjach zamiennych
The Role of the Call Option in Convertible Bonds

Summary/Abstract: The aim of the article is to identify the motives of using the call option in convertible debt. The analysis encompasses 956 issues of convertibles with the call and the put/call option carried out by the American enterprises from the service and manufacturing sector between 2004–2014. It turns out that the issuers of the callable convertibles are less profitable but have higher growth opportunities than the issuers of the bonds with the put/call provision. Adding the call option may help them to force conversion before maturity, if new investments increase their profitability. Using callable/putable convertibles may be aimed at avoiding an issue of undervalued shares and help companies to delay raising equity capital. They may detach the put/call option perhaps in order to get the right to redeem bonds before maturity, if bondholders do not convert debt into shares during a conversion period.

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