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- Publisher
- Wiley
- Copyright
- Accounting and Finance © 2016 AFAANZ
- ISSN
- 0810-5391
- eISSN
- 1467-629X
- DOI
- 10.1111/acfi.12125
- Publisher site
- See Article on Publisher Site
Abstract
This study examines why non‐financial publicly traded firms knowingly issue wealth destroying Rule 144A debt, which is associated with a negative announcement return and a higher yield. We provide a plausible ‘demand‐side’ explanation (i.e. last‐resort debt financing) for the motivation for issuing such debt. We also provide evidence as to what drives this negative reaction. Our findings suggest that the negative market impact is mainly driven by short‐selling pressure from convertible bond arbitrageurs.
Journal
Accounting & Finance – Wiley
Published: Dec 1, 2016
Keywords: ; ; ; ;