Los instrumentos obligatoriamente convertibles como fuente eficiente de capital

• Autores: Ángel Huerga González
• Directores de la Tesis: Carlos Rodríguez Monroy (dir. tes.)
• Lectura: En la Universidad Politécnica de Madrid ( España ) en 2019
• Idioma: español
• Tribunal Calificador de la Tesis: Fernando Hernández Sobrino (presid.), Yilsy Núñez Guerrero (secret.), Eva María Mora Valentín (voc.), Vicenc Fernández Alarcón (voc.), Pablo Angel Cansado Bravo (voc.), Carmen de Pablos Heredero (voc.), David Martín Casero (voc.)
• Programa de doctorado: Programa de Doctorado en Ingeniería de Organización por la Universidad Politécnica de Madrid
• Materias:
  • Ciencias económicas
    • Economía internacional
      • Financiación internacional
    • Organización y dirección de empresas
      • Gestión financiera
      • Estudios industriales
• Enlaces
  • Tesis en acceso abierto en: Archivo Digital UPM
• Resumen

  • Debt securities are often an efficient and inexpensive resource to finance the balance sheet of companies; however, one of the causes of the global financial crisis was the excessive leverage taken by companies.

    Hybrid capital instruments share characteristics of equity and debt, and allow companies to finance its balance sheet in a more sustainable way by reducing leverage, but tend to increase its overall cost of capital. Mandatory Convertible Bonds (MCBs) are hybrid financing instruments that are very close to equity; rating agencies assign them a high equity component and are commonly treated as equity by accounting standards. Despite the high nominal coupon that mandatory convertible bonds seem to pay in some cases, a deeper analysis shows that the cost of issuing MCBs can be similar and even lower than the cost of issuing senior debt.

    The first three chapters of this thesis are an introduction to convertible bonds, to mandatory convertible bonds, and to other financing instruments that include equity volatility in their design. Afterwards, this thesis analyses mandatory convertible bonds from the perspective of the issuing company and their impact in the financial sustainability of firms.

    Chapter five of this thesis performs an empirical research of the implicit cost of all the mandatory convertible bonds issued between 2010 and 2018. The study shows the relationship between the implicit yield of mandatory convertible bonds and the yield of the senior debt; additionally it shows the impact of convertible arbitrage investors in such cost. The results indicate that mandatory convertible bonds can be a sustainable capital alternative that offers a reasonable cost not only for high yield companies or new ventures, but also for well-established investment grade issuers. The access to efficient and not very expensive capital to finance the balance sheet of companies can promote sustainable growth, industrialization, and innovation.

    Chapter six presents the second empirical research of the thesis, which analyses how a balance sheet instrument like the mandatory convertible bond can mitigate the agency problem. A large proportion of the academic literature about the agency problem focuses on corporate governance or on management incentive methods that can be used to balance the incentives of shareholders and debt holders. Mandatory convertible bonds can be a method to increase the value for shareholders, without increasing the perceived default risk. Following the real options company valuation framework, one method to increase shareholder value involves increasing the intrinsic risk of the firm; however, such practice reduces, in turn, the value for bondholders. The results of this empirical analysis illustrate that, for companies in a weak credit position, the agency problem can be mitigated by the issuance of mandatory convertible bonds, which allows managers to increase company risk without being detrimental for debt holders. However, when the probability of distress is small, shareholders have less incentive to increase company risk in a company funded by mandatory convertible bonds, being their incentives more aligned with bondholders. A better alignment of debt holders and shareholders incentives reduces inefficiencies, mitigates the probably of distress and improves the long-term financial sustainability of companies.