Treasury share-backed exchangeable bond issuance and control-related financing choice: Evidence from Korea

초록

This study examines the control-related motive for issuing exchangeable bonds backed by treasury shares (EB_TS) by comparing them with other company share-backed exchangeable bonds (EB_OS), convertible bonds (CBs), bonds with warrants (BWs), and straight debt. Using data from Korean listed firms between 2011 and 2023, we find that firms with higher controlling shareholder ownership are more likely to issue EB_TS relative to other hybrid bonds, while straight debt remains the preferred option over EB_TS. These findings suggest that EB_TS issuance may reflect not only financing needs but also control-related incentives for controlling shareholders among hybrid bonds. The results provide broader implications for understanding security choice in markets with weak investor protection and strong controlling shareholders' influence.

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