Further Evidence of Unsatisfied Clienteles in International Capital Financing

Numerous studies find that shareholders do not gain from the security sales. This study documents a significant exception, new capital offerings by Japanese banks. Market reactions to these sales are significantly positive; however, these issues have two unusual features. First, new convertible bonds and equity shares are simultane‐ously offered. Second, the issues are often denominated in multiple currencies and sold in multiple countries. Tests indicate that the multiple markets/multiple currency feature is strongly related to abnormal performance. These findings are consistent with an unsatisfied clientele in international security sales of creditworthy firms.