Where are they now? An analysis of the life cycle of convertible bonds

We study the determinants of the life convertible bonds' life span issued between 1980 and 1998. About 60% of the bonds survive either to a call or to their maturity. The issuers of the remaining bonds are delisted during the life of their bonds. Calls and delistings shorten the average life span of convertibles from the original 17 years to an effective life span of only seven years. Issuer's post-issuance performance and investment behavior affect the effective life of convertibles. Our results support the sequential financing hypothesis, as bonds issued by firms with speedier investment schedules have shorter life spans.