L. L. Ecker-Racz, Whither State and Local Finance?, The Journal of Finance, Vol. 19, No. 2, Part 1: Papers and Proceedings of the Twenty-Second Annual Meeting of the American Finance Association, Boston, Massachusetts, December 27-29, 1963 (May, 1964), pp. 370-381

ABSTRACT Share price reactions to announcements of 61 private placements of convertible debt securities are investigated and a significant positive average abnormal return of 1.80% is documented. This unique result contrasts with the negative average abnormal return associated with public sales of convertible debt securities. The positive effect on common shareholders' wealth appears to be related to the relative size of the private issue and unrelated to the degree to which the convertible bond is “out‐of‐the‐money” at issuance.

Share price reactions to announcements of sixty-one private placements of convertible debt securities are investigated and a significant positive average abnormal return of 1.80 percent is documented. This unique result contrasts with the negative average abnormal return associated with public sales of convertible debt securities. The positive effect on common shareholders' wealth appears to be related to the relative size of the private issue and unrelated to the degree to which the convertible bond is "out-of-the-money" at issuance.