| Both convertible bonds (Cbs) and seasoned offerings are important
financing tools. Whether their motives, purposes, and information content are
different is worth of exploring. This study does an integrated research on these
By questionnaire and event studies, this research found that the main motive of
issuing Cbs is of the low par-rate, while higher cash inflow premium for
seasoned offerings. But no difference on financing purposes is shown.
On the other hand, taking no advantage of Cbs to finance is due to the absence
of popularity among investors. Most of the companies, however, investigated
demonstrate interest in this instrument for the coming financing needs. As for
the reasons the institutional investors did not pay much attention to Cbs is
mainly because of the high conversing price, low volatility, and long period of
freezing to convert into stocks.
Regarding to the impact on stock price, this study found no significant effects
from both financing instruments. But the asymmetrical information hypothesis
received a directional support, since the negative impact from seasoned
offerings is greater than that of Cbs.