An analysis of the benefits of issuing convertible debt in South Africa: Shoprite Holdings Ltd case study

The aim of this paper is to investigate Shoprite’s decision to issue convertible bonds despite South African firms tending to favour traditional forms of debt or equity. The paper first revisits the theory on convertible debt to consider the possible reasons for why Shoprite elected to issue convertible debt, and then develops two models, the first to quantify Shoprite’s debt capacity and cost of debt, the second to value the convertible bond issue, and quantify the benefit, if any, that convertible bonds achieved as opposed to a straight debt or equity issue.

Grantor dc:publisher.institution

Department of Finance and Tax

Year dc:date.issued

2013

Author dc:creator

• Wormald, Simon

Advisor dc:contributor.advisor

• Holman, Glen

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/11427/11058

OAI identifier oai:identifier

oai:open.uct.ac.za:11427/11058