Zapped by negative gamma in Japan
In Europe, the desire of companies to restructure their balance sheets to offer shareholders more value is a major factor driving convertible issuance. However, using convertibles is often far from straightforward. “Pre-emptive rights for anything equity-related and limited flexibility for corporate share repurchases have restricted market growth,” says Farley Bolwell, managing director at Merrill Lynch.
Nor is it immediately obvious why issuing a convertible would be a useful tool in offering value to shareholders.
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