L'annonce, par une entreprise, de l'émission d'obligations convertibles : a-t-elle des impacts sur le cours de l'action sous-jacente ?

Abstract

The impact of convertible bonds issuance is a topic studied by lot of researchers. Most of these studies show that the stock price reacts negatively while a company announce a convertible bonds issuance. Therefore, the announcement sends a negative message to the investors. On the contrary, few studies state that the market reacts positively in some countries. As no studies were conducted the Belgian, French and German market using actual data, we find interesting to investigate on it. In order to do this, we have managed an event study on 56 firms that issued convertible bonds on these markets.

The goal of our study is therefore to examine the announcement effect of convertible bonds issuance on the markets mentioned above between January 2007 and May 2017. Our research shows that the announcement of the convertible bonds issuance is associated with a significant negative stock price reaction. Indeed, we find in average a negative stock’s abnormal return of – 1,77% the day of announcement.

Furthermore, we analyse the relationship between firm’s characteristics and the intensity of the market reaction. Therefore, we test if firm’s characteristics such as the size of the firm, the leverage level and the relative issue size influence the abnormal returns of the underlying stock price during a convertible bonds issuance. We finally discover that the size of the convertible bonds issuance has a negative effect on the stock price reaction.