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Journal articles on the topic 'Convertible bonds'

Author: Grafiati

Published: 4 June 2021

Last updated: 31 July 2024

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1

REALDON, MARCO. "VALUATION OF EXCHANGEABLE CONVERTIBLE BONDS." International Journal of Theoretical and Applied Finance 07, no. 06 (September 2004): 701–21. http://dx.doi.org/10.1142/s0219024904002657.

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This paper provides a structural valuation model for exchangeable convertible bonds, since such bonds are widespread by now. The model is solved through the Hopscotch finite difference method. As the issuer owns the underlying shares, exchangeable convertibles may be called and the exchange option may be exercised even as the issuer experiences financial distress. The value of exchangeable convertibles always decreases in the volatility of the issuer's assets (unlike the value of ordinary convertibles) and decreases in the correlation between the underlying shares and the issuer's assets. The analysis confirms that the dominant motive for issuing exchangeable convertibles is likely to be to dispose of the underlying shares.

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2

Li, Ping, and Jing Song. "Pricing Chinese Convertible Bonds with Dynamic Credit Risk." Discrete Dynamics in Nature and Society 2014 (2014): 1–5. http://dx.doi.org/10.1155/2014/492134.

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To price convertible bonds more precisely, least squares Monte Carlo (LSM) method is used in this paper for its advantage in handling the dependence of derivatives on the path, and dynamic credit risk is used to replace the fixed one to make the value of convertible bonds reflect the real credit risk. In the empirical study, we price convertible bonds based on static credit risk and dynamic credit risk, respectively. Empirical results indicate that the ICBC convertible bond has been overpriced, resulting from the underestimation of credit risk. In addition, when there is an issue of dividend, the conversion price will change in China's convertible bonds, while it does not change in the international convertible bonds. So we also empirically study the difference between the convertible bond's prices by assuming whether the conversion price changes or not.

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3

Kohlman, Bruce R., and Robert C. Radcliffe. "Factors Affecting The Equity Price Impacts Of Convertible Bonds." Journal of Applied Business Research (JABR) 8, no. 4 (October 4, 2011): 79. http://dx.doi.org/10.19030/jabr.v8i4.6128.

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This study examines abnormal stock returns associated with both the date a convertible bond issue is announced and the date it is sold. Results suggest the negative stock price effects observed I this and previous studies are due to the equity component inherent in convertible bonds, and an easily observed measure of that equity component is offered. In addition, results suggest that convertible bond issues sold by firms with previously issued outstanding convertibles are met with larger negative abnormal equity returns.

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4

Sı⁁rbu, Mihai, Igor Pikovsky, and Steven E. Shreve. "Perpetual Convertible Bonds." SIAM Journal on Control and Optimization 43, no. 1 (January 2004): 58–85. http://dx.doi.org/10.1137/s0363012902412458.

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5

Batten, Jonathan A., Karren Lee-Hwei Khaw, and Martin R. Young. "Pricing convertible bonds." Journal of Banking & Finance 92 (July 2018): 216–36. http://dx.doi.org/10.1016/j.jbankfin.2018.05.006.

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6

Nelken, Izzy. "Japanese Reset Convertible Bonds and Other Issues in Convertible Bonds." Journal of Alternative Investments 2, no. 4 (March 31, 2000): 1.1–7. http://dx.doi.org/10.3905/jai.2000.318975.

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7

Nelken, Izzy. "Japanese Reset Convertible Bonds and Other Issues in Convertible Bonds." Journal of Alternative Investments 2, no. 4 (March 31, 2000): 35–41. http://dx.doi.org/10.3905/jai.2000.35.

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8

Sun, Zhongquan, Le Yang, and Lin Tong. "Research on Convertible Bond Issuance Program." Frontiers in Business, Economics and Management 11, no. 3 (October 26, 2023): 59–62. http://dx.doi.org/10.54097/fbem.v11i3.12952.

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As of 2023, it has been 32 years since convertible bonds were introduced into China. In 1992, Baoan convertible bonds, as China's first convertible bonds, were issued with an issue size of RMB 500 million, thus opening the door to China's convertible bond market. However, for a long time, due to the imperfection of relevant laws and regulations, the growth rate of the convertible bond market has been very slow, and listed companies prefer equity financing, which makes it difficult for convertible bonds to be implemented on a large scale. However, since 2015, the Securities and Futures Commission (SFC) has issued a series of laws and regulations, including the Implementing Rules for the Non-public Offering of Shares by Listed Companies (2017) and the Notice on Matters Relating to the Reporting of Procedural Transactions of Convertible Bonds (2021), which shows that the SFC intends to promote the standardized development of convertible bonds. As a result, the number and size of convertible bonds have grown rapidly, and convertible bonds have become increasingly popular among low-risk investors. In the increasingly hot situation of the convertible bond market, this paper chooses Jiangnan Water Company as a typical case representative, through the analysis of its convertible bond issuance program, the company's early resale behavior of the motivation and impact to find the problems in the corporate issuance of convertible bonds, and for the future want to issue the convertible bonds of the company to provide the applicable recommendations, the following is the research of this paper to improve some of the measures: choosing the right time of sale; the establishment of convertible bonds early warning system, strengthen internal control; according to the financing project to select the appropriate financing methods, and so on.

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9

Bai, Wanlu, and Chengzong Meng. "The development and application of convertible Bonds -- A case study of Shanghai Pudong Development Bank's Convertible Bonds." BCP Business & Management 38 (March 2, 2023): 149–57. http://dx.doi.org/10.54691/bcpbm.v38i.3682.

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In recent years, with the continuous strengthening of refinancing demand, banks have more diversified ways of refinancing, such as perpetual bonds, secondary capital bonds, and convertible bonds. It is found that convertible bonds meet the capital replenishment needs of commercial banks, and the financing cost is compared with that of other financing instruments. The method adopted in this paper is the case analysis, and the "Pudong Development Convertible Bond" publicly issued by Shanghai Pudong Development Bank (SPDB) in 2019 is taken as the case study object. Based on the background that commercial banks are scrambling to issue related schemes of convertible bonds, this paper expounds on the financing effect and significance of the issuance of convertible bonds by SPDB based on the historical process and current situation of convertible bonds and the basic situation and financing process of SPDB. Comprehensive analysis shows that before the issuance of convertible bonds, the asset-liability ratio of SPD Bank is relatively high. After the issuance of convertible bonds, the asset-liability ratio and capital adequacy ratio of banks have been improved, but the return rate and net profit level have been negatively affected. The paper hopes to provide a reference value for issuers such as commercial banks and listed companies as well as regulators of convertible bonds on the improvement of the market system of convertible bonds.

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10

Stevens, William T., Ara G. Volkan, and Paul D. Baker. "Accounting For Convertible Bonds." Journal of Applied Business Research (JABR) 10, no. 4 (September 22, 2011): 130. http://dx.doi.org/10.19030/jabr.v10i4.5915.

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First, various views of convertible bonds (CBs) are analyzed along with current professional standards of accounting. Present rules are found to be flawed because they do not properly: (1) measure the interest cost of the CB and the total financing cost resulting from the issuance of debt and conversion commitments inherent in the CB; (2) classify the commitments arising from the CB; and (3) account for the conversion of the CB. Based on deductive reasoning and theoretical and empirical evidence, an accounting methodology for CBs is proposed that: (1) recognizes separately the debt and conversion commitments of the CB at date of issuance; (2) recognizes the total financing expense on the CB arising from the interest cost and in the increase in the fair value of the conversion commitment; and (3) accounts for the conversion under the market value method.

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11

Szymanowska, Marta, Jenke Ter Horst, and Chris Veld. "Reverse convertible bonds analyzed." Journal of Futures Markets 29, no. 10 (October 2009): 895–919. http://dx.doi.org/10.1002/fut.20397.

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12

Liu, Jian, Lizhao Yan, and Chaoqun Ma. "Valuing Convertible Bonds Based on LSRQM Method." Discrete Dynamics in Nature and Society 2014 (2014): 1–9. http://dx.doi.org/10.1155/2014/301282.

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Convertible bonds are one of the essential financial products for corporate finance, while the pricing theory is the key problem to the theoretical research of convertible bonds. This paper demonstrates how to price convertible bonds with call and put provisions using Least-Squares Randomized Quasi-Monte Carlo (LSRQM) method. We consider the financial market with stochastic interest rates and credit risk and present a detailed description on calculating steps of convertible bonds value. The empirical results show that the model fits well the market prices of convertible bonds in China’s market and the LSRQM method is effective.

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13

Ranosz, Robert. "Bonds convertible to raw materials in the context of bonds convertible to shares and ordinary bonds." E3S Web of Conferences 10 (2016): 00080. http://dx.doi.org/10.1051/e3sconf/20161000080.

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14

YAGI, KYOKO, and KATSUSHIGE SAWAKI. "THE VALUATION OF CALLABLE-PUTTABLE REVERSE CONVERTIBLE BONDS." Asia-Pacific Journal of Operational Research 27, no. 02 (April 2010): 189–209. http://dx.doi.org/10.1142/s0217595910002636.

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Many companies issue some complex structured bonds. A reverse convertible bond is one of such structured bonds. In this paper we consider a valuation model of callable-puttable reverse convertible bonds which have the complex payoff in a setting of the optimal stopping problem between the issuer and the investor. Reverse convertible bonds issued by a company can be exchanged for the shares of another company. We analyze the pricing of reverse convertible bonds with call and put clauses and explore analytical properties of the value of the reverse convertible bond and optimal call and put boundaries by the issuer and the investor, respectively. Furthermore, we investigate how the call and put clauses affect the value and the optimal strategies for both of them.

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15

Tian, Yuxin, and Jun Chen. "The Analysis of Chinese Convertible Bond Market." Journal of Economics and Public Finance 6, no. 2 (April 23, 2020): p104. http://dx.doi.org/10.22158/jepf.v6n2p104.

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Convertible bond is a type of hybrid security with both bond- and stock-like features. The Chinese market of convertible bonds has developed dramatically during the last decade. This paper will conduct a comprehensive analysis of this market. Firstly, a brief introduction of convertible bond and the historical evolution of this market in China is presented, then we analyze various investment risks related to convertible bonds. Next, this paper proposes the basic valuation model for convertible bonds, which is the Black-Scholes model and modifies it by taking the delusion effect of conversion into account, leading to the Gailai-Schneller model. In addition, the differences of the outcomes obtained by these two models are compared and analyzed based on the pricing of Shanghai Electric convertible bond. In the sixth part, this paper mainly explains two types of applications of convertible bonds in portfolio management. In the end, several problems existing in Chinese convertible market as well as some suggestions for solving them are discussed.

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16

Yan, Honglei, Suigen Yang, and shengmin zhao. "Research on convertible bond pricing efficiency based on nonparametric fixed effect panel data model." China Finance Review International 6, no. 1 (February 15, 2016): 32–55. http://dx.doi.org/10.1108/cfri-04-2015-0030.

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Purpose – The purpose of this paper is to study the pricing efficiency of convertible bonds and arbitrage opportunities between the convertible bonds and the underlying stocks thus improve market efficiency. Design/methodology/approach – Using nonparametric fixed effect panel data model, the authors build pricing model of convertible bonds and obtain fitted value for them. Then the authors constructs simultaneous confidence band for the smooth function to identify mispricing and study the pricing efficiency and arbitrage opportunities of convertible bonds. Findings – Result shows, convertible bonds’ prices largely depend on stock prices. Pricing efficiency does not improve during the past few years as there are quite a few trading opportunities. Arbitrage opportunities increase as the stock prices approach it maxima, and selling opportunities for convertible bonds surpass buying opportunities which indicates that investors use market neutral strategies to arbitrage. Pricing efficiencies varies a lot and it is affected by the features of the stocks and convertible bonds. Index stocks eligible for margin trading with high liquidity enjoy higher pricing efficiency. Research limitations/implications – The study does not take into account trading cost and risk management measures. Practical/implications – Arbitrage between the underlying and the convertible bonds is profitable and contributes to pricing efficiency therefore should be encouraged. The regulator should pay attention to the extreme mispricing of the underlying and convertible bonds which cannot be corrected by the market as there might be manipulation. Originality/value – Since traditional pricing methods are based on the framework of non-arbitrage equilibrium with the assumption of balanced and perfect market, there are many restrictions in the pricing process and the practical utility is somewhat limited, and the impractical assumptions lead to model risk. This study uses nonparametric regression to study the pricing of convertible bonds thus circumvents the problem of model risk. Simultaneous confidence band for smooth function identifies mispricing and explicitly reflects the variation of pricing efficiency as well as signalizes trading opportunities. Application of nonparametric regression and simultaneous confidence band in derivative pricing is advantageous in accuracy and simplicity.

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17

Meng, Yiyang. "Research on Pricing Model of Chinese Convertible Bonds." Frontiers in Business, Economics and Management 11, no. 3 (October 26, 2023): 80–84. http://dx.doi.org/10.54097/fbem.v11i3.13191.

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This paper aims to create a new model for convertible bond pricing based on convertible bond rules and convertible bond strategies. And based on the concept of value investment, this paper analyzes and deduces various situations of convertible bonds by using future cash flow discount thinking. In addition, two new options that achieve the conditional call price and options that exceed the conditional call price are presented, and a more flexible formulation of the model for computing the price of convertible bonds is derived. However, this model requires the user to have some experience with convertible bonds. This might make a bit of sense for academic development and could help people better understand and participate in the convertible bond market.

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18

Zhang, Zhiqiang, Zhenfang Wang, and Xiaowei Chen. "Pricing Convertible Bond in Uncertain Financial Market." Journal of Uncertain Systems 14, no. 01 (March 2021): 2150007. http://dx.doi.org/10.1142/s1752890921500070.

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This paper is devoted to evaluating the convertible bonds within the framework of uncertainty theory. Under the assumption that the underlying stock price follows an uncertain differential equation driven by Liu process, the price formulas of convertible bonds and the callable convertible bonds are derived by using the method of uncertain calculus. Finally, two numerical examples are discussed.

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19

Bierman, Harold. "Convertible Bonds and Hedge Funds." Journal of Investing 12, no. 1 (February 28, 2003): 47–51. http://dx.doi.org/10.3905/joi.2003.319533.

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20

Chakraborty, A., and B. Yilmaz. "Adverse Selection and Convertible Bonds." Review of Economic Studies 78, no. 1 (January 1, 2011): 148–75. http://dx.doi.org/10.1093/restud/rdq002.

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21

West, Jason. "Convertible Bonds and Stock Liquidity." Asia-Pacific Financial Markets 19, no. 1 (March 2, 2011): 1–21. http://dx.doi.org/10.1007/s10690-011-9139-3.

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22

Singh, Ajai K., Arnold R. Cowan, and Nandkumar Nayar. "Underwritten calls of convertible bonds." Journal of Financial Economics 29, no. 1 (March 1991): 173–96. http://dx.doi.org/10.1016/0304-405x(91)90018-f.

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23

Hirte, Heribert. "Convertible Bonds and Option Bonds: A Comparative Study." European Business Organization Law Review 1, no. 3 (September 2000): 507–37. http://dx.doi.org/10.1017/s1566752900000240.

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24

Jo, Kihwan, Gahyun Choi, Jongwook Jeong, and Kwangwon Ahn. "Information flow among stocks, bonds, and convertible bonds." PLOS ONE 18, no. 3 (March 23, 2023): e0282964. http://dx.doi.org/10.1371/journal.pone.0282964.

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This study examines the information flow between convertible bonds (CBs) and other investment assets, such as stocks and bonds. In particular, we employ transfer entropy (TE) as a proxy for the causal effect between the two assets considering that one of the most widely used methods, Granger causality, requires strict assumptions. When adopting TE, we find that asymmetric information flow arising between assets depends on macroeconomic phases. The stock and bond markets affected the CB market prior to and during the global financial crisis, respectively. In the post-crisis period, we find no meaningful information exchange between CBs and other investment assets concerning their return series. However, we observe a significant cause–effect relationship between CBs and stocks in the rise–fall patterns of their price series. The findings suggest that the appearance of one-directional information flow depends on macroeconomic conditions and the level of data, for example, return series or price fluctuations. Accordingly, investors could exploit this pattern predictability in their portfolio management. In addition, policymakers must closely monitor the information flow among the three markets. When any two markets exchange information in a state of strong market integration, unbalanced regulation between them could lead to market distortions and regulatory arbitrage.

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25

Shuran, Ying, and Dai Jing. "Changes in Early Redemption Rules for Convertible Bonds and an Examination of the Effect of Forced Redemption." Advances in Economics, Management and Political Sciences 49, no. 1 (December 1, 2023): 297–301. http://dx.doi.org/10.54254/2754-1169/49/20230532.

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In 2022, the Shanghai Stock Exchanges and Shenzhen Stock Exchanges (SSE and SZSE) made a series of amendments to the convertible bond trading rules and self-regulation of listed companies. In addition to this, SSE and SZSE made more detailed requirements on the time and process for listed companies to exercise their rights for convertible bond redemption in advance. By summarizing and analysing the data of convertible bonds listed by the Shanghai Stock Exchanges and Shenzhen Stock Exchanges in China in the past 10 years, this paper introduces the background of the convertible bond market, analyses the characteristics of convertible bonds redeemed early and the impact of early redemption of convertible bonds on listed companies, and explores what kind of forced redemption effect has been produced by the new changes of convertible bond regulations. The paper also explores the implications of the forced redemption effect on investors by considering the changes in the convertible bond market since its inception.

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26

Chang, Chong-Chuo, Tai-Yung Kam, Chih-Chung Chien, and Wan Su. "The Impact of Financial Constraints on the Convertible Bond Announcement Returns." Economies 7, no. 2 (April 8, 2019): 32. http://dx.doi.org/10.3390/economies7020032.

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As of now, very few research studies have examined the effects of financial constraints on the short- and long-term performances of companies after their announcement of convertible bonds. Due to asymmetric information, previous studies consider issuance of convertible bonds as negative news. As a result, the short- and long-term performances of companies generally decline after their convertible bond announcement. This study argues that when companies have investment plans, they are expected to have higher future cash flows. They will become increasingly more valuable regardless of the fact that they raise funds through the issue of convertible bonds (due to financial constraints), positively affecting the performance of companies. The results indicate that financial constraints have no effect on short-term performance, but did have a significantly positive impact on the long-term performance of companies after their issuance of convertible bonds.

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27

Liu, Jian, Mengxian Tao, Chaoqun Ma, and Fenghua Wen. "Utility indifference pricing of convertible bonds." International Journal of Information Technology & Decision Making 13, no. 02 (March 2014): 429–44. http://dx.doi.org/10.1142/s0219622014500527.

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We propose a pricing model for convertible bonds based on the utility-indifference method and get access to the empirical results by use of Information Technology. By using the stochastic control theory, the general expression of utility indifference price on convertible bonds is obtained under the CIR interest rate model. Furthermore, using the proposed theoretical model, we present an empirical pricing study of China's market, using three convertible bonds and more than 70 months of daily market prices. The parameters value is estimated by the maximum likelihood method, and the prices of convertible bonds are simulated by the Monte Carlo approach. The empirical results indicate that the theoretical prices are higher than the actual market prices 0.24–4.58%, and the utility indifference prices are better than the Black–Scholes (BS) prices.

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28

Hao, Shijie. "An Empirical Study on the Impact of Convertible Bond Financing on Corporate Performance Taking China's A-Share Listed Companies as an Example." Advances in Economics, Management and Political Sciences 65, no. 1 (December 28, 2023): 75–84. http://dx.doi.org/10.54254/2754-1169/65/20231588.

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Convertible bond is a financing means of both stock and bond, and it is also a refinancing means of listed companies in our country. Based on the study of convertible bonds, this paper analyzes the impact of convertible bond issuance on the financial performance of the issuer, and through the analysis of different financial indicators of China's A-share listed companies, draws the following conclusions: in 2017 and beyond, convertible corporate bonds can bring significantly higher return on total assets, and convertible corporate bonds have forward utility.And put forward the following reference suggestions, for the regulatory authorities, not only to gradually relax the threshold of bond issuers, but also to strengthen supervision. For investors, convertible bond financing can be used as a criterion to screen non-financial companies with a good business environment, and they should also continue to pay attention to the use of funds issued by convertible corporate bond companies.

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29

Zhang, Wei-Guo, and Ping-Kang Liao. "Pricing Convertible Bonds with Credit Risk under Regime Switching and Numerical Solutions." Mathematical Problems in Engineering 2014 (2014): 1–13. http://dx.doi.org/10.1155/2014/381943.

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This paper discusses the convertible bonds pricing problem with regime switching and credit risk in the convertible bond market. We derive a Black-Scholes-type partial differential equation of convertible bonds and propose a convertible bond pricing model with boundary conditions. We explore the impact of dilution effect and debt leverage on the value of the convertible bond and also give an adjustment method. Furthermore, we present two numerical solutions for the convertible bond pricing model and prove their consistency. Finally, the pricing results by comparing the finite difference method with the trinomial tree show that the strength of the effect of regime switching on the convertible bond depends on the generator matrix or the regime switching strength.

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30

SINANI, Lira, and Elvin MEKA. "Contingent Convertible Bonds (CoCo bonds) and their market development in Albania." Jus & Justicia 18, no. 1 (2024): 23–38. http://dx.doi.org/10.58944/jtmy3628.

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Convertible Contingent Bonds are important financial instruments for the stability of the banking and financial system in general. The role of innovative financial instruments is crucial to help address the challenges posed by these critical situations. One of these reintroduced instruments with ambitions to enhance the stability of the banking sector is the “Contingent Convertible Bond,” abbreviated as “CoCo.” This paper aims to explore the impact of the use of Convertible Contingent Bonds (CoCo) in financial crisis situations and their effect on avoiding the domino effect of a bank failure. Starting from the critical factor of the stability of the financial system, this analysis aims to shed light on the potential of these innovative instruments in improving the stability of the banking sector as well as the need for their modeling in the Albanian banking sector, considering the lack of treatment particular of these instruments in the current legislation. The analysis of the possibilities for their application in the Albanian banking system shows that, if implemented successfully, they can increase the regulatory capital of banks, strengthen financial stability and reduce the risk of government intervention in cases of crises. In conclusion, the use of CoCo bonds in Albania should be accompanied by the improvement of legislation and the encouragement of financial institutions’ investments in these instruments, to create a safer and more stable environment in the country’s banking sector. Keywords: Contingent Convertible Bonds (CoCo bonds), Basel III, resolution, financial crisis.

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31

ROGOZIN, S. S. "ARBITRAGE OPPORTUNITIES USING HYBRID FINANCIAL INSTRUMENTS." EKONOMIKA I UPRAVLENIE: PROBLEMY, RESHENIYA 1, no. 6 (2021): 112–15. http://dx.doi.org/10.36871/ek.up.p.r.2021.06.01.016.

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The article discusses the features of the “convertible arbitrage” strategy using a hybrid financial instrumentconvertible bonds. The characteristics of convertible bonds as a financial market instrument are given. The article analyzes the conduct of convertible arbitrage in terms of the motives and factors that affect the implementation of the strategy; the basic possible scenarios are given.

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32

Guo, Xu, and Haiyang Wang. "Dividends Sharing Convertible Bonds Pricing and Numerical Evaluation." Mathematical Problems in Engineering 2013 (2013): 1–10. http://dx.doi.org/10.1155/2013/932579.

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The convertible bond is becoming one of the most important financial instruments for the company to raise capital fund since it was first issued by American New York Erie Company in 1843. In this paper, it is the first time to study the pricing problem for convertible bond whose underlying stocks pay dividends via the reflected backward stochastic differential equations. Associating the solutions of reflected BSDEs with the obstacle problems for nonlinear parabolic PDEs, we establish the pricing formulas for convertible bonds with continuous and discrete dividends by means of the viscosity solutions for some PDEs. Besides, we also derive the price of convertible bonds with higher borrowing rate which is realistic in the financial market. Then the numerical evaluations are provided by the radial basis functions method. Moreover, we discuss the influence of dividends paying as well as higher borrowing rate on the convertible bond price at last.

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33

Obong’o, Ernest Misat, Fredrick Mutea, and Nancy Rintari. "Influence of Convertible Bonds on Liquidity Growth of Commercial Banks in Nairobi County Kenya." International Journal of Finance 5, no. 1 (September 16, 2020): 44. http://dx.doi.org/10.47941/ijf.443.

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Purpose: The purpose of this study was to investigate the influence of convertible bonds on liquidity growth of commercial banks in Nairobi county KenyaMethodology: This research applied descriptive research design when gathering data by closed-ended questionnaires on 39 commercial banks in Nairobi County Kenya and secondary data from commercial banks dating from 2016-2018. Overall operations managers, marketing managers and general managers were the respondents. Census technique was used. Pre-testing questionnaires was issued to branch marketing managers, operational managers and assistant managers in simple randomly selected five commercial banks located in Meru county Kenya. SPSS data analysis software was be consulted for quantitatively using the descriptive statistics such as mean, percentage and standard deviation. Tables, graphs and detailed explanations was used to present the final results of the study.Results: The study found out that there was a statistically significant positive relationship between convertible bonds and liquidity growth of commercial banks in Nairobi county Kenya. Convertible had an R value of .732 and an R square value of 0.536. This proved that convertible bonds predicted 53.6% of the changeability in the liquidity growth. The regression coefficients of convertible bonds had a β=.117, P=010 at 0.00 significance level.Unique contribution to theory, policy and practice: The discovery of presence of positive influence of convertible bonds on liquidity growth led to new knowledge contribution by the study. The study recommended that more types of customized bonds should be issued and public awareness should be raised. The study recommended that policies should be developed by government through the central bank whereby bank customers can obtain bonds more often just like the way mobile loan apps are common. This would promote more market for the bonds. Commercial banks should also indemnify various types of bonds with insurance firms so that any misfortune of events like the recent covid-19 pandemic would have minimal impact on the various types of fixed-rate bonds. The study contributed new knowledge when the relationship between corporate bonds and liquidity growth of commercial banks in Nairobi was established.

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34

Ranosz, Robert. "The Raw Materials Convertible into Bonds." Gospodarka Surowcami Mineralnymi 32, no. 2 (June 1, 2016): 79–94. http://dx.doi.org/10.1515/gospo-2016-0011.

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Abstract This article is dedicated to the instrument such as raw materials convertible bonds, the application of which in the mining industry can increase the efficiency of mining investments and, consequently, contribute to the improvement of the economic and financial market of mineral resources. Bonds with the option of conversion into raw materials bring relevant benefits to both the investor – the bondholder who buys these bonds, and to the mining company as the issuer. The use of this debt instrument increases the efficiency of mining investments, mainly by lowering the cost of capital in relation to traditional sources and by flexibility of being able to convert the capital debt into raw materials. Due to the fact that the article is illustrative only, and its goal is just to present a relatively new instrument, which are raw materials convertible bonds, the author focused an attention on its possible use in the financing of investments in the mining industry and the potential economic effects of such a solution. In order to identify the likely financial benefits, discussed debt instrument was compared with selected sources of funding, such as ordinary bonds and simple bank loan. Due to this fact, the article doesn’t present the consideration of every aspect associated with the bond that has an option, but is mainly focused on its main attribute, which is the ability to convert debt into raw material. The paper presents the general assumptions regarding the raw materials convertible bonds, the advantages of this solution and the requirements that the issuer of such instrument will have to cope with. The article contains also a diagram showing the use of a raw materials convertible bonds in the tripartite agreement. The final part of the publication shows an example of a calculation comparing the newly presented instrument to the ordinary bonds and bank loans. The summary presents the conclusions of the analysis of the possible use of raw materials convertible bonds as an instrument of financing investments in the mining industry.

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35

Ammann, Manuel, and Ralf Seiz. "Pricing and Hedging Mandatory Convertible Bonds." Journal of Derivatives 13, no. 3 (February 28, 2006): 30–46. http://dx.doi.org/10.3905/jod.2006.616866.

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36

Finnerty, John D., and Mengyi Tu. "Valuing Convertible Bonds: A New Approach." Business Valuation Review 36, no. 3 (November 2017): 85–102. http://dx.doi.org/10.5791/bvr-d-17-0001.1.

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37

Dong, Ming, Marie Dutordoir, and Chris Veld. "Why Do Firms Issue Convertible Bonds?" Critical Finance Review 7, no. 1 (July 10, 2018): 111–64. http://dx.doi.org/10.1561/104.00000048.

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38

Goard, Joanna. "An analytical approximation for convertible bonds." ANZIAM Journal 64 (August 28, 2022): 135–48. http://dx.doi.org/10.21914/anziamj.v64.16740.

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This paper looks at adapting the method of Medvedev and Scaillet for pricing short-term American options to evaluate short-term convertible bonds. However unlike their method, we provide explicit formulae for the coefficients of our series solution. This means that we do not need to solve complicated recursive systems, and can efficiently provide fast solutions. We also compare the method with numerical solutions, and find that it performs extremely well, giving accurate bond prices as well as accurate optimal conversion prices. doi:10.1017/S1446181122000062

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39

Crépey, Stéphane, and Abdallah Rahal. "Pricing convertible bonds with call protection." Journal of Computational Finance 15, no. 2 (December 2011): 37–75. http://dx.doi.org/10.21314/jcf.2011.258.

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ASQUITH, PAUL. "Convertible Bonds Are Not Called Late." Journal of Finance 50, no. 4 (September 1995): 1275–89. http://dx.doi.org/10.1111/j.1540-6261.1995.tb04058.x.

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41

Cowan, Arnold R., Nandkumar Nayar, and Ajai K. Singh. "Underwriting and Calls of Convertible Bonds." Decision Sciences 31, no. 1 (March 2000): 57–77. http://dx.doi.org/10.1111/j.1540-5915.2000.tb00924.x.

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Li, Wei-Hsien, S. Ghon Rhee, and Carl Hsin-han Shen. "CEO inside debt and convertible bonds." Journal of Business Finance & Accounting 45, no. 1-2 (November 9, 2017): 232–49. http://dx.doi.org/10.1111/jbfa.12285.

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Kühn, Christoph, and Kees van Schaik. "Perpetual convertible bonds with credit risk." Stochastics 80, no. 6 (October 20, 2008): 585–610. http://dx.doi.org/10.1080/17442500802263888.

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Lin, Yi-Mien, Chin-Fang Chao, and Chih-Liang Liu. "Transparency, idiosyncratic risk, and convertible bonds." European Journal of Finance 20, no. 1 (July 3, 2012): 80–103. http://dx.doi.org/10.1080/1351847x.2012.681791.

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45

Stein, Jeremy C. "Convertible bonds as backdoor equity financing." Journal of Financial Economics 32, no. 1 (August 1992): 3–21. http://dx.doi.org/10.1016/0304-405x(92)90022-p.

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Ammann, Manuel, Axel Kind, and Christian Wilde. "Simulation-based pricing of convertible bonds." Journal of Empirical Finance 15, no. 2 (March 2008): 310–31. http://dx.doi.org/10.1016/j.jempfin.2006.06.008.

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47

Billingsley, Randall S., Robert E. Lamy, and G. Rodney Thompson. "VALUATION OF PRIMARY ISSUE CONVERTIBLE BONDS." Journal of Financial Research 9, no. 3 (September 1986): 251–59. http://dx.doi.org/10.1111/j.1475-6803.1986.tb00455.x.

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48

Martynova, Natalya, and Enrico Perotti. "Convertible bonds and bank risk-taking." Journal of Financial Intermediation 35 (July 2018): 61–80. http://dx.doi.org/10.1016/j.jfi.2018.01.002.

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49

Lummer, Scott L., and Mark W. Riepe. "Convertible Bonds as an Asset Class." Journal of Fixed Income 3, no. 2 (September 30, 1993): 47–56. http://dx.doi.org/10.3905/jfi.1993.408078.

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50

Tsiveriotis, Kostas, and Chris Fernandes. "Valuing Convertible Bonds with Credit Risk." Journal of Fixed Income 8, no. 2 (September 30, 1998): 95–102. http://dx.doi.org/10.3905/jfi.1998.408243.

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