재무적 곤경 비용을 고려한 수의상환 채권의 재무전략

위정범(Jung Bum Wee) 한국경영학회 2006 經營學硏究 Vol.35 No.2

This paper theoretically explores the effect of cost of financial distress on the design and calling of a bond. A callable bond, in this paper, represents both callable non-convertible bonds and callable convertible bonds. This paper adopts a game model of the manager-shareholder and the bondholder, wher the former is a strategic player and the latter is a price-taker.Regarding callable non-convertible debt, the model predicts that, in equilibrium, a firm defaults with the same probability as in the case of issuing the optimal standard bond. It implies that a callable non-convertible bond has no relative advantage over a standard bond when the cost of financial distress is considered.However, the model provides an interesting implication regarding the timing of call that a call price applicable at a later time is relatively higher than a call price applicable for an earlier time as the cost of financial distress is larger. It implies that a firm should expect to pay relatively higher call price if it calls a bond later instead of calling right now. Thus, a firm is less likely defer calling because the marginal benefit of deferring is lower. This result can be explained by that a firm issues a callable bond to reduce the chance of financial distress. Calling a non-convertible bond tends to be expedited when the cost of financial distress is large. Calling entails recapitalization. By exercising a call option embedded in a bond, a firm repays outstanding debts and raise new funds. It tends to have a stronger incentive to exercise call options early and thus avoid financial distress since the cost of financial distress is larger.On the other hand, the model shows that a firm remains bond-financed in a strictly larger set and defaults in a strictly smaller set of realized states in an intermediate period if it issues a callable convertible bond instead of a non-convertible bond. A firm is defined to remain bond-financed if a bond was issued in the beginning and has been neither called nor converted. Thus, a callable convertible bond enhances, if any, the benefit of bond-financing because a firm remains bond-financed with higher probability. It also mitigates cost of default because a firm defaults with lower probability. This result is driven by the design of a convertible bond. A convertible bond is designed to be converted if the return of a firm is relatively poor.This implies that, if information asymmetry is incorporated, a relatively good firm may issue a callable non-convertible bond for signaling while a relatively poor one issues a callable convertible bond. A good firm can incur signaling cost by issuing a non-convertible bond because a non-convertible bond has relative disadvantage. A poor firm chooses to be separated by issuing a convertible bond if it is better off. It also explains the relatively poor performance of firms around a call of convertible debt reported by existing literature. This may be further interpreted as implying that a call conveys negative information.In equilibrium, cost of financial distress ambiguously influences a sequence of call prices contrary to a non-convertible bond. Thus, the theoretical prediction about the effect of cost of financial distress on calling a convertible bond is ambiguous. A firm need not hurry calling to recapitalize because it becomes equity-financed and, therefore, free from default risk once a convertible bond is forced to be called.

전환권 행사로 발행된 신주에 관한 신주 발행의 무효 사유와 무효 사유에 따른 쟁송 방법 - 대법원 2022. 11. 17. 선고 2021다205650 판결에 대한 평석을 중심으로 -

신병동 충북대학교 법학연구소 2023 法學硏究 Vol.34 No.2

The target judgment is that if there is a reason for invalidation in the issuance of convertible bonds, a lawsuit for invalidation of the issuance of convertible bonds may be filed, but after the filing period, the lawsuit for invalidation of the issuance of new shares cannot claim the reasons related to the issuance of convertible bonds, and only unique reasons for the exercise of convertible rights and the resulting issuance of new shares may be asserted. However, since the right to convert is a formative right, it is not easy to assume that there is a reason for invalidation in the exercise of the right to convert and the resulting issuance of new shares because new shares are issued without having to meet other requirements as long as the expression of intention to claim the conversion reaches the company. Defects in the exercise of conversion rights and the resulting issuance of new shares can be assumed, for example, if a convertible creditor issues new shares even though there is no intention of requesting conversion, if the party exercises the conversion right after the conversion claim period, or if the company misrepresents the conditions of the conversion and miscalculates the number of shares issued. Considering that such reasons are difficult to occur in practice, and that even if there is such a defect, it must be so serious that it is contrary to the nature of the stock company or the basic principles of the company law that it can be a reason for invalidation of the issuance of new shares, it is very difficult to win a victory after the party filed a lawsuit to invalidate the issuance of new shares due to the exercise of the right to convert and the resulting issuance of new shares. If new shares are issued due to the exercise of conversion rights, most of the reasons for invalidation of the issuance of new shares stem from the issuance of convertible bonds. The target judgment also recognizes exceptions when there are special circumstances in order to overcome the problem that the party's right to file a complaint is excessively reduced. Citing the legal principles mentioned in bonds with underwriting rights sentenced just before the target judgment was sentenced, the ruling recognizes an exception that "if a convertible bond is issued to a third party for the purpose of defending the management rights of major shareholders, and then a major shareholder acquires new shares by exercising the right to convert." In this case, it is practically the same as issuing new shares to major shareholders for the purpose of defending management rights, and in reality, the issuance of new shares will infringe on shareholder rights or change governance structure of existing shareholders. The target judgment suggests that the criteria for the exception were issued to a third party for the purpose of defending the management rights of major shareholders, etc., and that the major shareholders, etc. exercised the right to convert by taking it over. I would like to examine whether the attitude of this subject judgment is reasonable and further examine the method of dispute for new shares issued due to the exercise of the right to convert.

의무전환사채에 관한 소고

서종희 ( Jong Hee Seo ) 법과사회이론학회 2011 법과 사회 Vol.0 No.40

Mandatory Convertible is that a type of convertible bond that has a required conversion or redemption feature. Either on or before a contractual conversion date, the holder must convert the mandatory convertible into the underlying common stock. Mandatory convertibles have become popular in recent times. Despite the large size of international and especially Korea in 2008 mandatory convertible markets, very little research on the pricing of mandatory convertibles has been undertaken. There are also a few articles dealing with the rationale of and the stock market reactions to issuing mandatory convertibles. These securities provide investors with higher yields to compensate holders for the mandatory conversion structure. That is to say, mandatory convertibles are equity-linked hybrid securities and can be thought of as yield enhanced equity. Mandatory convertibles pay higher dividends than common stock for a number of years and then mandatorily convert to common stock on a pre-specified date. These securities are the most equity-like of all convertible securities and, unlike normal convertibles, they provide little downside protection because mandatory convertibles usually have no fixed terminal value. Instead, the security will mandatorily convert into a variable number of stocks at maturity. These are often used when a traditional equity issuance would otherwise place severe market pressure on the underlying stock. So, mandatory convertibles allow highly leveraged(or temporarily troubled) companies to restructure their balance sheet by helping to control for the asymmetric information problem. Besides, because mandatory convertibles are akin to stock or a juristic act subject to a condition precedent rather than debt, they are not very sensitive to changes in interest rates. In future, we must study on the pricing of mandatory convertibles and the rationale of and the stock market reactions to issuing mandatory convertibles. Finally, I think that study, research and urgent legislation at mandatory convertibles is needed.

전환사채 발행자의 회계처리와 주가 변화에 따른 재무적 영향: 전환권 분류를 중심으로

김영준,이유진,한승엽 한국회계학회 2019 회계저널 Vol.28 No.5

Recently, many Korean convertible bond issuers reported large valuation losses on derivatives after their stock price increased, leading to significant increases in leverage and, for some extreme cases, negative net assets. To understand this counterintuitive phenomenon in which good news to a company (i.e., stock price increases) lead to the deterioration of financial conditions, this study provides theoretical explanations on the accounting treatments for convertible bonds. Specifically, the study explains that embedded conversion rights are classified as equity (liabilities) when convertible bonds are issued without (with) a refixing clause and how this classification of the conversion rights affects the initial measurement and subsequent valuation of conversion rights. Relatedly, this study analyzes how the classification of conversion rights affects the convertible-bond issuers’ future cash outflows, debt-to-equity ratios, and level of retained earnings, and show that information users can infer the probability of conversion from the issuers’ financial statements. Lastly, the study applies the aforementioned theoretical discussions to a real case of convertible bond issuance (Kyung Nam Pharmaceutical Co., Ltd.). This study enhances the understanding of convertible bonds and embedded derivatives by bridging the gap between accounting textbooks that mainly introduce convertible bonds with fixed conversion ratios and practices that more frequently trade convertible bonds with a refixing clause. 최근 주가 상승으로 인하여 전환사채 발행자들이 대규모 평가손실을 인식하고 있으며, 이로 인해 부채비율이 상승하고 자본 잠식이 일어나는 등 전환사채 발행 기업의 재무구조가 악화되고 있다는 언론 보도가 이어지고 있다. 본 연구는 기업에 호재인 주가 상승이 전환사채 발행자의 재무구조 악화로 귀결되는 모순적 현상을 설명하기 위해 전환가격재조정(이하 ‘리픽싱’) 조건의 포함 여부에 따라 달라지는 전환사채 발행자의 회계처리를분석한다. 구체적으로 전환사채에 리픽싱 조항이 포함되지 않는 경우 내재된 전환권이 자본으로 분류되는 반면, 리픽싱 조항이 포함되는 경우 내재된 전환권이 부채(파생상품부채) 로 분류되며, 이러한 전환권의 자본·부채 분류 결과에 따라 전환권의 최초 측정 방법 및 후 속 평가 여부가 달라진다는 사실을 밝힌다. 이와 관련하여 본 연구는 전환권의 분류가 후속적으로 전환사채 발행자의 미래 현금유출액, 부채비율 및 이익잉여금 규모에 미치는 영향에 대해 분석하고, 발행자의 재무제표를 통해 전환사채의 전환 가능성에 대한 정보를 추론할 수 있음을 보인다. 마지막으로 본 연구는 전환사채 발행기업(경남제약)의 실제 공시자료를 통해 이론적인 분석 내용을 적용해 본다. 본 연구는 발행조건에 따라 달라지는 전환사채 발행자의 회계처리와 재무효과를 체계적으로 소개함으로써 전환가격이 고정된 사례를 편중적으로 다루고 있는 회계 교과서와 리픽싱 조건이 빈번하게 활용되는 실무 간의 간극을 줄이고, 다양한 이해관계자들이 전환사채 및 전환권을 심도있게 이해하는 데 기여할것으로 기대된다.

해저 보행 로봇 CR200을 위한 매니퓰레이터 기능을 갖는 다리 개발

강한구(Hangoo Kang),심형원(Hyungwon Shim),전봉환(Bong-Huan Jun),이판묵(Pan-Mook Lee) 제어로봇시스템학회 2013 제어·로봇·시스템학회 논문지 Vol.19 No.8

This paper presents the development of a specialized underwater leg with a manipulator function(convertible-to-arm leg) for the seabed walking robot named CRABSTER200(CR200). The objective functions of the convertible-to-arm leg are to walk on the seabed and to work in underwater for precise seabed exploration and underwater tasks under coastal area with strong tidal current. In order to develop the leg, important design elements including the degree of freedom, dimensions, mass, motion range, joint structure/torque/angular-speed, pressure-resistance, watertight capability and cable protection are considered. The key elements of the convertible-to-arm leg are realized through concept/specific/mechanical design and implementation process with a suitable joint actuator/gear/controller selection procedure. In order to verify the performance of the manufactured convertible-to-arm leg, a 25bar pressure-resistant and watertight test using a high-pressure chamber and a joints operating test with posture control of the CR200 are performed. This paper describes the whole design, realization and verification process for implementation of the underwater convertible-to-arm leg.

ON CONTRACTIBLE NONNEGATIVE CONVERTIBLE MATRICES

LEE, GWANG-YEON,SONG, SEOK-ZUN 濟州大學校 基礎科學硏究所 1996 基礎科學硏究 Vol.9 No.2

An n×n matrix A is called convertible if there is an n×n(1,1)-matrix H such that per A=det(AㆍH) where AㆍH denotes the Hadamard product of A and H. A convertible(0,1)-matrix is called extremal if replacing any zero entry with a 1 breaks the convertibility. In this paper, some properties of contractible nonnegative convertible matrices are investigated and finds and extremal matrix. We present new proofs for the extremality of Un and Vn,k.

종류주식의 다양화와 자금조달의 유연성에 관한 법적 쟁점 분석

김순석 한국상사법학회 2008 商事法硏究 Vol.27 No.2

According to the Revised Draft of Korean Commercial Code(KCC) which was announced for public comments on May 7, 2008 by the Korean Ministry of Justice, various class stocks are scheduled to be introduced in order to enhance the efficiency of corporate equity financing. Class stock of profit sharing and distribution of remaining asset, class stock of restraining voting rights, class stock of share transfer, class stock of redemption and class stock of convertibility are included. This article mainly deals with class stock of profit sharing and distribution of remaining asset, class stock of redemption, and class stock of convertibility. First of all, the draft of the KCC does not adopt tracking stock system. Considering current Korea’s accounting principles and practices, it seems to be difficult to introduce tracking stock in near future which reflects the performance of specific business, or group of business owned by issuing company. However, it is desirable to introduce tracking stock which links the performance of subsidiary’s business, because the subsidiary is independent corporate entity and it will be much easier to reflect the performance of subsidiary’s business. Regarding class stock of redemption and class stock of convertibility, even though lots of regulated legal measures are alleviated in order for efficient equity financing, redemption of common stock is not allowed because of worrying abuse as a defense mechanism of hostile merger and acquisition. This problem is mainly related to public companies. However the KCC applies public and closed companies together. Therefore, the KCC must allow redemption of common stock, and problem of public companies caused by redeeming common stock should be dealt through the enlisted manual of stock exchange. This article also suggests to integrate current separate provisions of class stock of redemption and class stock of convertibility. It offers to expand the financial resources for redeeming class stock of redemption. In addition to distributable earnings, legal reserve which can be classified into the earned surplus reserve and the capital surplus reserve may be utilized as redeemable financial resources. Finally, this article analyzes how shareholders’ equal rights affect in developing various class stocks. According to the Revised Draft of Korean Commercial Code(KCC) which was announced for public comments on May 7, 2008 by the Korean Ministry of Justice, various class stocks are scheduled to be introduced in order to enhance the efficiency of corporate equity financing. Class stock of profit sharing and distribution of remaining asset, class stock of restraining voting rights, class stock of share transfer, class stock of redemption and class stock of convertibility are included. This article mainly deals with class stock of profit sharing and distribution of remaining asset, class stock of redemption, and class stock of convertibility. First of all, the draft of the KCC does not adopt tracking stock system. Considering current Korea’s accounting principles and practices, it seems to be difficult to introduce tracking stock in near future which reflects the performance of specific business, or group of business owned by issuing company. However, it is desirable to introduce tracking stock which links the performance of subsidiary’s business, because the subsidiary is independent corporate entity and it will be much easier to reflect the performance of subsidiary’s business. Regarding class stock of redemption and class stock of convertibility, even though lots of regulated legal measures are alleviated in order for efficient equity financing, redemption of common stock is not allowed because of worrying abuse as a defense mechanism of hostile merger and acquisition. This problem is mainly related to public companies. However the KCC applies public and closed companies together. Therefore, the KCC must allow redemption of common stock, and problem of public companies caused by redeeming common stock should be dealt through the enlisted manual of stock exchange. This article also suggests to integrate current separate provisions of class stock of redemption and class stock of convertibility. It offers to expand the financial resources for redeeming class stock of redemption. In addition to distributable earnings, legal reserve which can be classified into the earned surplus reserve and the capital surplus reserve may be utilized as redeemable financial resources. Finally, this article analyzes how shareholders’ equal rights affect in developing various class stocks.

컨버터블 차량의 승객 머리 주변 안락성 평가

조정식(Jungsik Cho) 한국자동차공학회 2007 한국자동차공학회 춘 추계 학술대회 논문집 Vol.- No.-

One of the comfort factors in convertibles with opened top is the flow around a driver's head. The flow structure in convertibles is dominated by a large separation and recirculation from the windshield and the A-pillar. Rapid velocity fluctuations and strong turbulence intensities are occurred at driving condition and direct effect on drivers' comfort. In this study, the flow around a driver's head was measured with opened top convertibles. A dummy which wears pressure sensing helmet was installed in the driver's seat. Flow velocity, static pressure and characteristic of the frequency were collected with various wind velocities. The results of each measurement method were compared to visualizations of hair fluttering with and without a wind deflector. Finally, the standard of comfort in convertibles with opened top was suggested.

전환사채 발행공시과정에서 나타나는 정보비대칭에 관한 실증연구

김예경 대한경영학회 2002 大韓經營學會誌 Vol.15 No.2

Recently investors have been interested in the effect of issuance announcement of convertible bonds on the stock price and in the reason why it is so effective. The purpose of this study is to examine abnormal stock returns associated with announcement of debt offerings, and to determine whether the abnormal stock returns at announcement of convertible debt offerings can be explained by information asymmetry models. This study also tested the hypothesis that managers issue convertible bonds when they consider stock prices as being overpriced. The empirical part of this study took a sample of 183 companies that issued convertible bonds during the period from January 1, 1994 to December 31, 1997. The study examined whether there took place abnormal stock returns during event period(AD -30 to AD +30) for the full sample and for the subsamples that are classified by the characteristics of convertible bonds, i.e., whether the bonds are guaranteed or not, the kind of the stocks into which the bonds will be converted, and the use for which the money was raised. The study also examined whether managers issue convertible bonds when they think stock prices are overpriced. Also, this study analyzed the relationship between abnormal stock returns and variables of information asymmetry models. In order to determine the factors that explain abnormal stock returns at announcement date, a multiple regression model(where, cumulative abnormal stock returns is an independent variable, and the variables used in the hypothesis associated with the issuance effect of convertible bonds are dependent variables) was employed. In order to examine the abnormal stock returns for the announcement period, themarket and risk adjusted model was selected. The findings of the empirical study can be summarized as follows: First, in the case of the full sample, an averaged abnormal return of one day after announcement is -0.424% which is significantly different from zero at the 5% level. This result indicates that there is a negative relationship between issuance announcement of convertible bonds and abnormal stock returns. However, in the case of subsamples, this negative relationship was found only in the bonds the conversion of which was guaranteed, the bonds that were converted into common stocks, and the bonds the money raised from which was used for operations and refinancing. Second, the empirical results in the full sample showed cumulative abnormal returns for the period, (AD -10 to AD -1), allowed the hypothesis(that managers issue convertible debt when they think sock prices are overpriced) to be accepted. In case of subsamples, the hypothesis was accepted only when the bonds were converted into common stocks and when the bonds were issued for operations and refinancing. This study has a limitation in drawing conclusions from its empirical data. The problem is in collecting data. This study selected independent variables for its regression model to analyze the extent of the influence of the issuance announcement of convertible bonds on the stock price. The values of the independent variables were obtained from the financial statements of the sampled firms. The problem is in the fact that the values of the independent variables appeared on the financial statements may not coincide with the values at the issuance announcement date. It is hoped that future studies on the information effect of convertible bonds on the stock price should be conducted in the direction of developing the models that can measure abnormal stock returns more elaborately and can better explain the factors that determine abnormal returns.

콜옵션 전환사채와 경영권 강화: 현대엘리베이터 사례

김영준 ( Young Jun Kim ),조미옥 ( Meeok Cho ),이수정 ( Su Jeong Lee ) 한국회계학회 2022 회계저널 Vol.31 No.2

최근 전환사채에 대한 콜옵션을 발행기업뿐만 아니라 제3자(주로 최대주주나 최대주주의 특수관계자)에게 부여되는 형태의 전환사채(이하 ‘콜옵션 전환사채’) 발행이 급증하고 있다. 이러한 콜옵션 전환사채의 발행목적은 최대주주의 지분율을 높여 발행기업에 대한 경영권 강화를 위한 것으로 알려져 있다. 본 연구는 콜옵션 전환사채 중 세간의 논란이 되었던 2015년 11월 발행된 제35회차 현대엘리베이터 콜옵션 전환사채 사례를 살펴본다. 본 연구는 해당사례를 통해 전환사채와 콜옵션 관련 회계처리를 검토하며 관련거래가 발행회사의 재무제표에 미치는 재무적 효과를 살펴본다. 본 연구는 학생들과 실무자들에게 실무에서 많이 거래되지만 회계학 교과서에는 다루지 않는 콜옵션 전환사채를 학습할 기회를 제공함으로써 이론과 실무의 간극을 좁힐 것이다. 또한 본 연구는 법적으로 발행이 금지된 금융상품을 우회하는 규제차익(regulatory arbitrage)을 통해 규제를 회피하는 금융혁신(financial innovation)의 사례를 보여준다. 나아가 많은 기업들이 콜옵션 전환사채를 이용해 규제차익을 발생시키고 콜옵션 전환사채와 유사한 사모 분리형 신주인수권부사채의 발행을 금지한 자본시장법을 무력화시킴으로써 현재 국내자본시장의 법의 허점(legal loophole)을 보여준다. 그리고 본 연구는 콜옵션 전환사채 관련 일련의 거래들을 회계학적 관점에서 자세히 분석함으로써 감독당국이 각 거래 단계별로 정교한 규제를 할 수 있는 바탕을 제공한다. Recently, numerous companies have issued convertible bonds with call options (hereinafter referred to as ‘callable convertible bonds’) to bypass the prohibition of issuing privately-placed bonds with detachable warrants effective 2013. This type of callable convertible bonds are different from traditionally issued callable bonds in that the call options embedded in convertible bonds are given to not only issuers but also unspecified third parties in the bond issuance date. It is alleged that the purpose of issuing callable convertible bonds is to increase the largest shareholders’ ownership and thus enhance their control. Callable convertible bonds are criticized for several reasons. First, the convertible bond issuer designates the call option holder as interested parties only when it is advantageous to convert the convertible bonds into shares does not specify the call option holder when issuing the convertible bonds. Persons who have been granted call options at the time when the conversion into stock is advantageous immediately exercises the call options on convertible bonds to acquire the convertible bond, exercise the conversion rights, and convert them to shares to increase their ownership. Second, it is difficult for investors or market participants to find out the call option premium of call option holders from the disclosure of call option transactions. Thus, callable convertible bonds are known to be a attractive investment vehicle for the largest shareholders who need to increase their ownership. Therefore, the call options on convertible bonds are controversial for stakeholders of companies that have disputes over the control rights. To alleviate these concerns, Financial Services Commission and Financial Supervisory Service have revised the regulation on securities issuance and disclosures in Korea. Callable convertible bonds are at the center of controversy in the Korean capital market. Thus, we review the accounting treatment related to callable convertible bonds and relevant disclosures, and also examine the effects of related transactions on issuer’s financial statements. This study examines the controversial case of Hyundai Elevator’s callable convertible bonds. Specifically, this study examines Hyundai Elevator’s 35th convertible bonds privately issued on November 8, 2015. We chose the convertible bonds of Hyundai Elevator because it is a case of much interest, and because Hyundai Elevator’s footnotes and disclosure are relatively detailed compared to other issuers, which helps readers understand the issues related to callable convertible bonds. This case study has the following academic and educational contributions. First, we describe how convertible bonds can be used to enhance control over a company. While accounting textbooks generally focus on the accounting treatment of convertible bonds, this study helps students understand how convertible bonds can be used with derivative products to affect the corporate ownership structure. Second, this study focuses on call option accounting for convertible bonds. Prior studies have focused on convertible rights in convertible bonds. However, this study investigates different types of call options as embedded derivatives and free-standing derivatives. In addition, we cover various accounting issues for convertible bonds, including firm’s own convertible bonds, refixing clauses on conversion prices, and disclosures on valuation losses on written call options. Third, this study narrows the gap between theory and practice by describing the usage of callable convertible bonds which is not covered in accounting textbooks but actively issued in practice. This study also provides implications for practitioners and policy makers. It can be useful for practitioners in the corporate finance department and in the financial investment industry. In addition, this study presents an example of financial innovation that circumvents regulation that prohibits the issuance of certain financial instruments. Further, using callable convertible bonds, many companies generate regulatory arbitrage and nullify the Financial Investment Services And Capital Markets Act, that prohibits the issuance of privately-placed bonds with detachable warrant similar to callable convertible bonds. This appears to be a legal loophole in Korean capital markets regulation. By examining a series of transactions related to callable convertible bonds from an accounting perspective, this study provides a basis for regulators to implement sophisticated regulations at each stage. Finally, this study suggests that the convertible bond market needs to implement fair rules, by showing that callable convertible bonds are unilaterally beneficial to designated recipients, the largest shareholders.