Do Hedge Funds Undertake Activism in the Bond Market? Evidence from Bondholders' Responses to Delay in Financial Reporting*
研究对冲基金是否在公司债券市场采取积极主义行动，利用2003-2007年债券持有人因发行人违反及时财务报告契约而行使权利的数据，发现对冲基金通过购买可转换债券增加持股，迫使发行人发出违约通知，以获取短期利润。
ABSTRACT We investigate whether hedge funds (HFs) undertake activism in the corporate bond market. Although there is a growing empirical literature investigating HF activism in the equity market, we know little about the role of HF activists in the corporate bond market. The empirical setting is the active enforcement of bondholders' rights during 2003–2007, triggered by issuers' violation of a standard bond covenant requiring timely financial reporting. Using HF holding data of convertible bonds in Form 13F filings, we identify HF interventions. The patterns of HF ownership suggest that HFs actively purchased convertible bonds to increase their ownership before the issuance of default notices. Relative to other interventions, HF interventions are more likely to target companies with higher levels of cash holdings but less likely to target companies with a greater amount of private debt outstanding. Furthermore, we find that HF interventions are associated with elevated bond trading frequency before late filing notifications and issuances of default notices, as well as a wealth transfer from stockholders and non‐intervening bondholders to intervening bondholders. Taken together, the empirical evidence demonstrates that HFs take actions to force the issuance of default notices in response to delay in financial reporting, suggesting that the primary objective of HF activism in this setting is to extract short‐term profit from bond issuers.