In a prior post we examined the nascent shift from convertible bonds being structured predominantly as “Flexible Settlement” towards being structured as “Net Share Settled”. This migration began in 2021 as issuers began to early-adopt the new accounting standards under FASB’s Accounting Standards ... >>>Read More
Early Read: No Meaningful Impact in Q1 from 1% Tax on Stock Buybacks
The Inflation Reduction Act of 2022 implemented an excise tax on corporations equal to 1% of the fair market value of stock repurchased during each taxable year, netted against the value of shares issued (including for stock-based compensation). The IRS followed up with more detailed guidance. The ... >>>Read More
Managing Debt in an Uncertain Environment – Assessing a Cash Repurchase
Macro market volatility along with a rise in interest rates has had a material impact to all asset classes in US capital markets. As a result, many debt securities (including convertible debt) are trading below par. In this blog post, we review why a potential repurchase of convertible bonds ... >>>Read More
Q1 2023 Convertible Market Review
As part of our market update series, please see the summary below of what we saw in the convertible market in Q1 2023 along with some key takeaways. Q1 volume of $13.2 billion was the highest in a quarter since Q4 2021 Technology issuers regained dominance, accounting for 38% of the deal count and ... >>>Read More
Apples and Oranges: Calculating and Comparing Repurchase Prices Is More Interesting than You Think
It is easy to compute a number for repurchase price per share: cash spent on buybacks divided by number of shares retired. For better informed decision-making, a more complete economic analysis of share repurchase programs that take place over time should reflect both (1) interest income, which has ... >>>Read More
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