Use of Public Debt Mezzanine Instruments in the Czech Republic

摘要

This paper deals with use of public debt mezzanine instruments, which include participating bonds, subordinated bonds, convertible bonds and bonds with warrants, by non-financial corporations and financial corporations in the Czech Republic. It aims to analyse and evaluate use of mezzanine financing instruments in the form of public debt mezzanine by selected economic entities in the Czech Republic in 2006 – 2012, and identify factors affecting the scope of their utilization. The performed research implies that public debt mezzanine instruments are used in the Czech Republic marginally only. Within the monitored period, these instruments were issued in the total volume of CZK13.43bn (i.e. about EUR0.49bn), where subordinated bonds got a share of CZK13.26bn (i.e. about EUR0.48bn). The share of newly issued public debt mezzanine instruments in the total financial sources of non-financial corporations and financial corporations within the monitored period was on the top in 2009, when it amounted to 0.08%. Wider utilization of public debt mezzanine instruments is particularly prevented by the fact that potential issuers are afraid of high costs relating to the process of issuance, but also to the life cycle of such an issue, and they are also afraid of lack of interest of investors (in the case of subordinated bonds and participating bonds), the owners’ fear of extension of control (in the case of convertible bonds and bonds with warrants), or the fact that it is difficult to estimate the cost of capital (in the case of participating bonds).