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Encore [electronic resource] : a convertible bond with a call-spread overlay / Sidharth Sinha

Author
Sinha, Sidharth
Published
London : Indian Institute of Management, Ahmedabad, 2020.
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1 online resource
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Summary
In December 2012, Encore Capital (Encore) was reviewing a proposal for an issue of convertible bonds to qualified institutional buyers, raising USD 115 million at an annual coupon of 3.0%, with a conversion premium of 25% above the stock price at issue. Simultaneously, with issuing the convertible bond, Encore would purchase a "bond hedge" in the over-the-counter equity derivatives market and sell warrants at 75% above the stock price at issue. The bond hedge and warrants' sale constituted the "call-spread overlay." Concurrent with the transaction, Encore would repurchase shares worth USD 25 million from the proceeds of the convertible bond issue. Encore had to decide whether to go ahead with the convertible bond issue.
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ISBN
9781529619645 : (ebook)
View MARC record | catkey: 42533804