Short-selling pressure and last-resort debt financing: evidence from 144A high-yield risk-adjusted debt

Tan, Kelvin Jui Keng, Lee, Jia Min and Faff, Robert (2015) Short-selling pressure and last-resort debt financing: evidence from 144A high-yield risk-adjusted debt. Accounting and Finance, . doi:10.1111/acfi.12125


Author Tan, Kelvin Jui Keng
Lee, Jia Min
Faff, Robert
Title Short-selling pressure and last-resort debt financing: evidence from 144A high-yield risk-adjusted debt
Journal name Accounting and Finance   Check publisher's open access policy
ISSN 0810-5391
1467-629X
Publication date 2015
Year available 2015
Sub-type Article (original research)
DOI 10.1111/acfi.12125
Total pages 37
Place of publication Richmond, VIC, Australia
Publisher Wiley-Blackwell Publishing Asia
Collection year 2016
Language eng
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.
Keyword Convertible bond arbitrage
Last-resort debt financing
Market reaction
Operational financing needs
Rule 144A debt
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2016 Collection
UQ Business School Publications
 
Versions
Version Filter Type
Citation counts: Scopus Citation Count Cited 1 times in Scopus Article | Citations
Google Scholar Search Google Scholar
Created: Tue, 10 Feb 2015, 13:25:52 EST by Dr Kelvin Jui Keng Tan on behalf of UQ Business School