Why Do Firms Issue Convertible Bonds? An Analysis of the Polish Convertible Debt Market Between 2009 and 2017

Damian Kaźmierczak


The purpose of the article is to identify the motives for the use of convertible bonds on the Polish capital market. Empirical examination of 71 convertible sales carried out by 38 issuers listed on the Warsaw Stock Exchange shows that more than half of convertibles in Poland were issued by undervalued companies in good financial performance to raise funds for new investment projects as a more favorable alternative for the issuance of common stock. Second, one third of convertibles were used by firms in financial distress to support their restructuring process as a cheaper and faster source of backdoor equity financing. Third, every fifth convertible bond was issued for tax benefits available under Polish law regulations.


corporate finance; debt financing; convertible bonds; Polish capital market

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DOI: http://dx.doi.org/10.17951/h.2018.52.5.17-25
Data publikacji: 2019-05-10 10:46:33
Data złożenia artykułu: 2018-07-03 08:13:50


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