The Use of Exchangeable Bonds During the Privatization Process

• Autorzy: Damian Kaźmierczak , Jakub Marszałek
• Języki publikacji: EN

Abstrakty

EN

In our article we present the use of hybrid securities in the privatization process. We show that exchangeable bonds may be successfully applied during privatization of state companies throughout the world. It may be profitable for many reasons. Firstly, the exchangeables offer a much lower coupon in comparison with the ordinary government bonds which may be crucial for highly indebted countries. Secondly, throughout the entire maturity period the state remains the owner of the privatized firm which means that the government can be a beneficiary of high dividends paid by the public enterprises and can actively manage them. Thirdly, in the case of unfavorable market conditions the authorities get an opportunity to wait for the end of economic turmoil in order to avoid selling the equity participations under their true value. Finally, the issue of certain types of exchangeables (e.g. callable exchangeables or mandatory exchangeables) and adding several provisions (e.g. greenshoe option or clean-up call) makes the instrument more flexible for the issuer. We also present a few examples of the privatization processes by means of exchangeable bonds i.a. in Germany and in Austria. Most of such operations, e.g. German Deutsche Post, Austrian Telekom Austria or Portuguese Galp Energia SGPS S.A. were completed with success. (original abstract)

Słowa kluczowe

EN

Bonds; Privatisation; Securities

PL

Obligacje; Prywatyzacja; Papiery wartościowe

• Czasopismo: e-Finanse
• Rocznik: 2013
• Tom: 9
• Numer: nr 4
• Strony: 86--95

Twórcy

autor

Damian Kaźmierczak

• University of Lodz, Poland

autor

Jakub Marszałek

• University of Lodz, Poland

Bibliografia

• 2004 fehlen Eichel 15 Milliarden Euro. (2003). Frankfurter Allgemeine Zeitung (121). Retrieved from: http://www.faz. net/aktuell/wirtschaft/finanzpolitik-2004-fehlen-eichel-15-milliarden-euro-1102734.html.
• Ammann, M., Fehr, M., Seiz, R. (2004). New Evidence on the Announcement Effect of Convertible and Exchangeable bonds. Journal of Multinational Financial Management, 16(1), 2006, 43-63.
• Barber, B. (1993). Exchangeable Debt. Financial Management, 22(2), 48-60.
• Bartolotti B., Fantini M., Siniscalco D. (2003). Privatisation Around the World: Evidence from panel data, Journal of Public Economies, 88(2), 307.
• Batchelor, C. (2005). Japanese Get Fresh Bite at Deutsche Post. Financial Times. Retrieved from: http://www.ft.com/ intl/cms/s/0/cead7106-64d6-11d9-9f8b-00000e2511c8. html