Why do Companies issue Convertible Bond Loans? An Empirical Analysis for the Canadian Market

We examine the wealth effects associated with the announcements of convertible debt offerings in the Canadian market for the period between 1991 and 2004.The average wealth effect for the three day event window is a significantly negative -2.7%.This result is in line with previous studies on other Anglo-Saxon markets, but it is different from other markets where generally no effect or even a positive effect is found.In addition, support is found for the negative effect of both debt- and equity-related agency costs.Event study;convertible bonds;wealth effects;agency costs

The Convertible Arbitrage Strategy Analyzed

This paper analyzes convertible bond arbitrage on the Canadian market for the period 1998 to 2004.Convertible bond arbitrage is the combination of a long position in convertible bonds and a short position in the underlying stocks. Convertible arbitrage has been one of the most successful strategies of hedge funds.This paper shows that the convertible arbitrage strategy has considerable effects on capital markets.First, there is a downward pressure on cumulative average abnormal returns of the underlying stocks between the announcement and the issuance dates of convertible bonds.Second, short sales of the underlying equity around the issuance dates strongly increase for equity-like convertibles. Third, convertible bonds are underpriced at the issuance dates.All effects are stronger for equity-like than for debt-like convertible bonds.Finally, we find that over a one-year period following the issue, equity-like convertibles earn a return that is more than 23 percentage points higher than the return of debt-like convertibles.In the last years of our sample, convertible arbitrage returns have strongly decreased.This seems to be related to a shift from equity-like to debt-like convertibles by the issuing companies.convertible arbitrage;short sales;underpricing;convertible bonds;abnormal returns

Contrarian Investment Strategies in a European Context

In this paper we study value strategies for four European countries (France, Germany, the Netherlands and the United Kingdom).We find an outperformance for all four value variables which are investigated: the earnings-to-price (E/P) ratio, the cash-flow-to-price (CF/P) ratio, the book-to-market (B/M) ratio and the dividend yield.This outperformance is especially remarkable for the CF/P ratio, which amounts to 20.8% between the top and bottom quintiles in an univariate model.In a regression analysis, in which all four value variables as well as a correction for the size effect are taken into account, we find a difference of 11.8% for the CF/P ratio.We demonstrate that this result can not be explained by risk differences alone.Our findings confirm the outperformance of value strategies as found earlier by Chan, Hamao and Lakonishok (1991) and Lakonishok, Shleifer and Vishny (1994) for Japan and the United States respectively.international financial markets;capital asset pricing;investment

Why do Companies issue Convertible Bond Loans? An Empirical Analysis for the Canadian Market

We examine the wealth effects associated with the announcements of convertible debt offerings in the Canadian market for the period between 1991 and 2004.The average wealth effect for the three day event window is a significantly negative -2.7%.This result is in line with previous studies on other Anglo-Saxon markets, but it is different from other markets where generally no effect or even a positive effect is found.In addition, support is found for the negative effect of both debt- and equity-related agency costs.

The Convertible Arbitrage Strategy Analyzed

This paper analyzes convertible bond arbitrage on the Canadian market for the period 1998 to 2004.Convertible bond arbitrage is the combination of a long position in convertible bonds and a short position in the underlying stocks. Convertible arbitrage has been one of the most successful strategies of hedge funds.This paper shows that the convertible arbitrage strategy has considerable effects on capital markets.First, there is a downward pressure on cumulative average abnormal returns of the underlying stocks between the announcement and the issuance dates of convertible bonds.Second, short sales of the underlying equity around the issuance dates strongly increase for equity-like convertibles. Third, convertible bonds are underpriced at the issuance dates.All effects are stronger for equity-like than for debt-like convertible bonds.Finally, we find that over a one-year period following the issue, equity-like convertibles earn a return that is more than 23 percentage points higher than the return of debt-like convertibles.In the last years of our sample, convertible arbitrage returns have strongly decreased.This seems to be related to a shift from equity-like to debt-like convertibles by the issuing companies.

Bandwidth renormalization due to the intersite Coulomb interaction

The theory of correlated electrons is currently moving beyond the paradigmatic Hubbard $U$, towards the investigation of intersite Coulomb interactions. Recent investigations have revealed that these interactions are relevant for the quantitative description of realistic materials. Physically, intersite interactions are responsible for two rather different effects: screening and bandwidth renormalization. We use a variational principle to disentangle the roles of these two processes and study how appropriate the recently proposed Fock treatment of intersite interactions is in correlated systems. The magnitude of this effect in graphene is calculated based on cRPA values of the intersite interaction. We also observe that the most interesting charge fluctuation phenomena actually occur at elevated temperatures, substantially higher than studied in previous investigations.Comment: New appendix on benzen

Biosignal and context monitoring: Distributed multimedia applications of body area networks in healthcare

We are investigating the use of Body Area Networks (BANs), wearable sensors and wireless communications for measuring, processing, transmission, interpretation and display of biosignals. The goal is to provide telemonitoring and teletreatment services for patients. The remote health professional can view a multimedia display which includes graphical and numerical representation of patients’ biosignals. Addition of feedback-control enables teletreatment services; teletreatment can be delivered to the patient via multiple modalities including tactile, text, auditory and visual. We describe the health BAN and a generic mobile health service platform and two context aware applications. The epilepsy application illustrates processing and interpretation of multi-source, multimedia BAN data. The chronic pain application illustrates multi-modal feedback and treatment, with patients able to view their own biosignals on their handheld device