Hybrid securities do not constitute a new phenomenon in the Swedish capital markets. Most commonly, hybrids issued by Swedish real estate companies in recent years are preference shares. Corporate hybrid bonds on the other hand may be considered as somewhat of a new-born child in the family of hybrid instruments. These do, as all other hybrid securities, share some equity-like and some debt-like characteristics. Nevertheless, since 2013 the interest for the instrument has grown rapidly and has become a well-accepted, as well as a fairly standardized, source of financing for many well-established corporations around the world. Yet, we have seen very few issues in Sweden and no issues by Swedish real estate companies. Corporate hybrid bonds could in a rather simplified manner be explained as a subordinated bond with some equity characteristics. Examples of such equity characteristics are perpetual maturity (or at least very long), coupon deferability and the fact that it due to its subordination provides significant loss absorption. Yet, it also holds typical debt-like characteristics such as regular coupon payments and seniority to equity. The outcome of this research has shown that issuing corporate hybrid bonds could be beneficial to a firm. Coupon payments are, unlike dividend payments to holders of preference shares but alike interest payments on a standard bank loan, tax deductible. Other probable advantages with corporate hybrid bonds are; a stronger credit profile (which potentially could improve the (shadow)credit-rating and thus also the terms of other sources of finance), a diversified investment base as well as diversification from a capital structure perspective. However, despite the many advantages, numerous obstacles remain. The main shortcoming highlighted among potential issuers is the high pricing of the instrument in relation to other alternatives. Moreover, the lack of Swedish investors investing in hybrid bonds, the assumingly poor liquidity of the product along with the high denomination (piece price) due to regulatory legislations make up for topics of concern among both potential investors and issuers. Although, considering the many benefits, we believe that the weaknesses can be overseen and that there is a potential future use for the product in event of further expansion and acquisition or if the access to capital markets is limited. After all, all good things take time. / Hybrid-instrument är i sig inget nytt fenomen på den svenska kapitalmarknaden. Mest förekommande bland svenska fastighetsbolag under de senaste åren är preferensaktier. Hybrid-obligationer å andra sidan kan betraktas som något av ett nyfött barn i familjen av hybridinstrument. Dessa delar, likt alla andra hybrid-papper, några eget-kapital-liknande och vissa skuld-liknande egenskaper. Sedan 2013 har intresset för instrumentet dock vuxit snabbt och blivit en väl accepterad, liksom en relativt standardiserad, finansieringskälla för många väletablerade företag runt om i världen. Ändå har vi sett mycket få emissioner i Sverige och inga av svenska fastighetsbolag. Hybridobligationer skulle på ett förenklat sätt förklaras som en underordnad obligation med vissa eget-kapital-egenskaper. Exempel på sådana egenskaper är evig löptid (eller åtminstone mycket lång), möjlighet att ställa in kupong-utbetalningar utan att vara i default och det faktum att det på grund av dess underordnad erbjuder betydande säkerhet för senior kreditgivare. Samtidigt innehar instrumentet också typiska skuldliknande egenskaper såsom regelbundna kupongbetalningar och senioritet till eget kapital. Resultatet av denna uppsats har visat en emission av hybridobligationer kan vara till nytta för ett företag. Kupongbetalningarna är, till skillnad från utdelning till innehavare av preferensaktier men likt räntebetalningar på ett vanligt banklån, skattemässigt avdragsgilla. Andra troliga fördelar med hybridobligationer är en starkare kreditprofil (som skulle kunna förbättra ett företags kreditbetyg och därmed också villkoren för andra finansieringskällor), en diversifierad investerarbas samt diversifiering ur ett kapitalstruktur-perspektiv. Trots de många fördelar består många hinder. Huvudsakligen lyfts den höga prissättningen av instrumentet i förhållande till andra alternativ fram bland potentiella emittenter som ett hinder. Dessutom utgör bristen på svenska investerare som investerar i hybridobligationer, den tänkbart dåliga likviditen samt den höga denomineringen (styckepris) skäl till oro bland både potentiella investerare och emittenter. Med bakgrund i de många fördelarna, anser vi att de brister som kvarstår går att kringgå och att det finns en potentiell framtida användning för produkten i händelse av ytterligare expansion och förvärv eller om tillgången till kapitalmarknaderna är begränsad. Trots allt, alla goda saker tar tid.

Thesis advisor: Thomas Chemmanur / My dissertation consists of three chapters. In the first chapter, I analyze the impact of firms' innovation success on their corporate financial policies. I hypothesize that innovation success reduces the information asymmetry facing firms and, through the information channel, affects their capital structure and dividend policies. I measure innovation success using the quantity and quality of patents. I show that firms with higher innovation success face lower information asymmetry, measured using analyst coverage, dispersion, and forecast error. Further, I show that firms with higher innovation success have lower leverage ratios; have a greater propensity to issue equity rather than debt; and have lower dividend payout ratios. I establish causality using instrumental variable analyses with patent examiner leniency as an instrument for patent grants. In the second chapter, co-authored with Thomas Chemmanur, Xuan Tian, and Qianqian Yu, we analyze the impact of trademarks in entrepreneurial firms' success. We hypothesize that trademarks play two economically important roles for entrepreneurial firms: a “protective” role, leading to better product market performance; and an “informational” role, signaling higher firm quality to investors. We develop testable hypotheses based on the above two roles of trademarks, relating the trademarks held by private firms to the characteristics of venture capital (VC) investment in them, their probability of successful exit, their valuations at their initial public offering (IPO) and in the immediate secondary market; institutional investor IPO participation; post-IPO information asymmetry; and post-IPO operating performance. We test these hypotheses using a large and unique dataset of trademarks held by VC-backed private firms. We establish causality using an instrumental variable (IV) analysis using trademark examiner leniency as the instrument. For private firms, we find that the number of trademarks held by the firm is positively related to the total amount invested by VCs and negatively related to the extent of staging by VCs. We show that the number of trademarks held by a firm increases its probability of successful exit (IPOs or acquisitions). Further, for the subsample of VC-backed firms going public, we show that the number of trademarks held by the firm leads to higher IPO and immediate secondary market firm valuations; greater IPO participation by institutional investors; a lower extent of information asymmetry in the equity market post-IPO; and better post-IPO operating performance. In the third chapter, co-authored with Thomas Chemmanur and Jinfei Sheng, we develop testable hypotheses and empirically analyze the effects of outside investors having access to soft information such as online employee ratings from the Glassdoor website on firms' financing and investment policies. We find that higher online employee ratings are associated with larger equity issue announcement effects; a greater propensity to have positive announcement effects and to issue equity rather than debt to raise external financing; higher investment expenditures; greater equity issue participation by institutional investors; and better long-run post-issue operating performance. We establish causality using a difference-in-differences methodology relying on the staggered adoption of anti-SLAPP laws across U.S. states. / Thesis (PhD) — Boston College, 2020. / Submitted to: Boston College. Carroll School of Management. / Discipline: Finance.

Prudent usage of financial leverage by managers can significantly impact business operations and a corporate’s performance. Thus, the determination and the understanding of the influence of financial leverage on the profitability of a corporation are intrinsic and indispensable for not only maximising the value of a firm but also improving its financial performance. This study adopted a quantitative research method, in which the theories were tested by multiple regression analysis in line with the positivism paradigm and deductive measure. Moreover, ontology belongs to the objectivist perspective, in which the authors viewed reality as a mechanism from the outside and focused only on observable and measurable facts. The authors investigated the capital structure and profitability of the 18 largest listed real estate companies in Sweden from 2016 to 2020. Leverage essentially consists of total liability to assets, short-term liability to assets and long-term liability to assets. Profitability is defined as the rate of return on assets (ROA), which represents the company's degree of profitability relative to total assets from an overall business perspective widely used for financial analysts. In order to accomplish the trustworthy study in the regression model, control variables were also introduced that comprised company size, liquidity and solvency. The result of this paper reveals that financial leverage is irrelevant for determining ROA in the real estate industry in Sweden.

European banks have as a result of the latest financial crisis and regulations such as Basel III started to decrease their liquidity to commercial real estate in an attempt to decrease the commercial real estate related assets in their books. The decreased lending in combination with an estimated need of refinancing of approximately €500 billion among the European commercial real estate actors in the upcoming years have forced the European commercial real estate lending market to undergo some structural changes to cope with the emerged funding gap. As a result of the decreased bank lending European real estate debt funds are starting to emerge as fund managers tries to capitalize on the present state of the lending market. The main focus of this thesis is the present state of the European real estate debt fund market and the Nordic institutional investors’ attitude towards the asset class. The research is primarily based on data collection regarding the European real estate debt funds currently in the market and a survey sent to the Nordic institutional investors regarding their attitude towards the new asset class. The research found that the European real estate debt fund market is a new asset class that has experienced extensive growth since the beginning in 2007 and currently consists of 47 funds employing senior debt, junior/mezzanine debt and whole loan debt strategies. The present attitude among the Nordic institutional investors is rather positive with a majority expecting the asset class to grow further in the future. Some of the institutional investors have as of today undertaken investments in European real estate debt funds and many are expecting their own future allocation to the asset class to increase. Although the general attitude towards the asset class is positive there are some obstacles to overcome in order for the asset class to secure its growth in the future. The most evident issue is the definition problem among the Nordic institutional investors. However as the information and interest for the asset class increases the obstacles are most likely to decrease and path the way for further growth for the European real estate debt funds. / Europeiska banker har i efterdyningarna av den senaste finanskrisen, och på grund av nytillkomna reglementen som Basel III, minskat sin exponering mot den kommersiella fastighetssektorn i ett försök att reducera de fastighetsrelaterade tillgångarna i sina balansräkningar. Den minskade utlåningen till sektorn har i kombination med ett uppskattat omfinansieringsbehov på ca €500 miljarder bland de Europeiska fastighetsinvesterarna tvingat den Europeiska fastighetskreditmarknaden att undergå strukturella förändringar för att hantera den uppkomna finansieringsbryggan. Tillföljd av den minskade bankutlåningen mot sektorn har fondförvaltare i ett försök att kapitalisera på situationen startat fonder som inriktar sig på att investera i fastighetskrediter/utlåning till kommersiella fastighetsinvesterare. Huvudfokuset för detta examensarbete är att upplysa om den rådande situationen på den Europeiska marknaden för fastighetskreditfonder samt de nordiska institutionella investerarnas inställning till den nya tillgångsklassen. Examensarbetet är primärt baserat på datainsamling rörande de nu existerande Europeiska fastighetskreditfonderna samt en enkät besvarad av Nordiska institutionella investerare gällande deras inställning till tillgångsslaget. Undersökningen fann att Europeiska fastighetskreditfonder är ett nytt tillgångsslag som har upplevt kraftig tillväxt sedan början av 2007. Marknaden består idag av 47 fonder som inriktar sig på senior, junior eller hel finansierings utlåning till kommersiella fastighetsinvesterare. Den rådande inställningen till tillgångsklassen bland de nordiska institutionella investerarna är förhållandevis positiv och en majoritet förväntar sig att tillgångsklassen kommer att fortsätta växa i framtiden. En del av de institutionella investerarna har redan idag genomfört investeringar i det nya tillgångsslaget och flertalet förväntar sig att investera i Europeiska fastighetskreditfonder i framtiden. Trots den rådande positiva inställningen till tillgångsklassen fann undersökningen några hinder som behöver överkommas för att en fortsatt tillväxt skall ske i framtiden. Det mest uppenbara hindret är hur tillgångsklassen skall definieras av de institutionella investerarna. Allteftersom informationen och intresset för de Europeiska fastighetskreditfonderna ökar kommer dock hindrena troligen att minska och bana vägen för en fortsatt tillväxt för tillgångsslaget.

Kommersiella fastigheter har setts som en inflationsskyddad tillgång och en viktig del i densvenska ekonomin. Stigande fastighetspriser och låga finansieringskostnader har varitfördelaktigt för de kommersiella fastighetsbolagen i Sverige. Många bolag har under periodenvarit aktiva på kapitalmarknaden och emitterat skuld till en låg kostnad. Under år 2022–2023har inflationen ökat vilket har genererat i penningpolitiska åtgärder som i sin tur ha genereraten ökad riskfri ränta. Finansieringskostnaden för svenska fastighetssektorn har ökat vilket harbidragit till att många fastighetsbolag har varit tvungna att se över sin finansiering. Obligationersom har emitterats under en period när räntan har varit låg är påväg att löpa ut och detmakroekonomiska händelserna kräver åtgärder från fastighetsbolagens sida. Under det senasteåret har fastighetsbolag genomfört obligationsåterköp som en åtgärd i att stärka den finansiellahälsan. Syftet med uppsatsen är att utvärdera incitamenten och effekterna av obligationsåterköpen somhar genomförts av svenska kommersiella fastighetsbolag. Uppsatsen baseras på branschinsattapersoner som genom sin kunskap och expertis anses ge perspektiv i studien. Utöver intervjuerbaseras uppsatsen på bolag av som har genomfört återköp. I studien framgår attobligationsåterköp genomförs som en rad bland andra åtgärder för att stärka bolagetsfinansieringssituation. Effekterna är starkt beroende av finansieringskällan och incitamenten ärbolagsspecifika. / Commercial real estate has long been regarded as an inflation-safe asset and a crucialcomponent in the Swedish economy. Raising real estate values and low financing costs hasbeen beneficial for Swedish commercial real estate companies. Several companies have beenactive on the capital market and issued bonds at a low cost. The inflation has been rising duringthe year 2022-2023, leading to monetary policy measures that have increased risk-free interestrates. As a result, Swedish commercial real estate has been forced to look over its financingside due to increasing financing costs. Bonds issued during a period of low interest are nowexpiring and the macroeconomic events require measures from the companies side. In the pastyear, several real estate companies have made bond repurchases as a measure to strengthen thefinancing side. This thesis aims to study the incentives and effects of the bond repurchases which have beenmade by Swedish real estate companies. The thesis is based on interviews with persons ofexperience from the commercial real estate and bond market to give perspective to this thesis.Additionally, the thesis is also based on companies that have made bond repurchases. Thefindings reveal that bond repurchases are made as one of other measures to strengthencompanies' financing side. The effects of these repurchases closely tied to the financing formof the repurchases and the incitements are company specific.

The nature of how capital structure can affect firm value is often investigated in the discipline of financial economics. Less investigated is how the nature of the type of assets can affect the choice of capital structure! I demonstrate that in the context of a Modigliani-Miller-type model that a firm financing social capital and physical capital will favor equity financing over debt financing without bankruptcy. With bankruptcy, debt financing will be used, but equity financing will be favored by firms that use large amounts of social capital, as it will increase their value. This demonstrates that social capital alters the financing relationship and helps to explain the preference of firms for equity financing.

1 Company financing analysis Abstract The aim of this thesis is to analyse the forms of financing a company, describe it, not only from a theoretical economic and legal point of view but also from a practical point of view, compare the advantages and disadvantages of various forms of financing and describe the economic and legal context and consequences of using different methods of financing. To fulfil this goal, the author used methods of analysis, comparison, induction and synthesis. The first chapter deals with the various ways of dividing the forms of financing the company, where the various types of capital are defined, which are concepts that are subsequently worked with in the following chapters. The second part of the first chapter then deals with a general description of the company's capital structure and then the basis for setting the optimal capital structure so as to achieve an ideal composition of debt and equity, especially in terms of minimizing the cost of capital and minimizing the risk resulting from the use of different types of capital. The second chapter then deals with the analysis of individual methods of financing the company from the equity and focuses mainly on financing from the company's share capital, shareholders' additional payments, depreciation, retained earnings and also...

In today’s financial markets, volatility is a fundamental concept in regards of the risk assessment of assets and instruments. Financial volatility is commonly used to measure the quantitative aspects of risk and is given a significant amount of attention in past literature and research. The leverage effect refers to the well-established negative relationship between return and future volatility. The relation is usually explained by the increased leverage ratio that arises from a drop in the share price for a firm. A lower price means lower value of the equity and while the debt remains unchanged, the leverage ratio will rise. The leverage ratio affect how risky the equity is from an investor’s perspective, hence affects the volatility of the stock. This paper aims to analyse whether the theory is applicable on the Swedish stock exchange and takes both individual stocks and the OMXS30-index into account. Further theories related to the model is acknowledged in order to enhance the analysis of the findings. The study is performed by a regression model where volatility, estimated through an EGARCH model, represents the dependent variable. Lagged return, together with a number of control variables, constitutes the explanatory variables. The findings claims that the leverage effect is present for individual stocks but can be rejected on the index level. Additionally, significant improvement was noticed when a dynamic approach was added to the model. The conclusions drawn is that the Swedish stock exchange facilitates the leverage effect for individual firms but it is off-set by other theories such as risk-return trade-off and volatility clustering for the index. / I dagens finansiella marknader är volatilitet ett fundamentalt koncept som är ytterst relevant i risk bedömningen av tillgångar och instrument. Finansiell volatilitet används ofta för att mäta risk i kvantitativ form och har på senare tiden uppmärksammats i allt större utsträckning. Leverage effekten (en.”the leverage effect”) refererar till det! väletablerade negativa samband som finns mellan avkastning i nuvarande period och framtida volatilitet. Sambandet mellan dessa faktorer har av många förklarats av en ökning i skuldsättningsgraden för ett företag. Skuldsättningsgraden ökar enligt teorin som en konsekvens av att aktiekursen sjunker, innebärande en värdeminskning av det egna kapitalet, samtidigt som skulderna förblir oförändrade. Skuldsättningsgraden påverkar i sin tur aktiens volatilitet genom en uppfattning av hur stor risk som kan förknippas med en investering i aktien. För att stärka analysen diskuteras, förutom leverage effekten, ett antal teorier som kan relateras till modellen. Uppsatsen syfte är att avgöra om leverage effekten är signifikant applicerbar på den svenska aktiemarknaden, både för individuella aktier samt OMXS30 indexet. Studien utförs genom en regressions modell där volatiliteten, estimerad genom en EGARCH model, representerar den beroende variabeln. Avkastningen i föregående period samt ett antal kontroll variabler utgör de oberoende variablerna. Resultatet visar att leverage effekten har stor applicerbarhet på de individuella aktierna men kan uteslutas på en index nivå. Dessutom ökar relevansen signifikant när en dynamisk angreppsätt adderades till modellen. Slutsatsen är att leverage effekten är närvarande på en individuell nivå men neutraliseras av teorier så som ”risk return trade off” och ”volatilitets klustring” på index nivå.

Efter finanskrisen 2008 blev bankerna mer restriktiva i sin utlåning till företag, vilket har resulterat i att företag söker alternativ finansiering via kapitalmarknaden. Utvecklingen kan härledas till implementeringen av den nya finansiella regleringen (Basel III). I den här uppsatsen analyserar jag den svenska marknaden för företagsobligationer. Jag undersöker vad som ligger bakom den kraftiga tillväxten samt hur marknaden kan komma att utvecklas framöver. Examensarbetet baseras på intervjuer med personer inom finanssektorn och tidigare forskning.På senare år har marknadsplatser såsom First North Bond Market och Räntetorget upprättats med syftet att göra marknaden mer tillgänglig för mindre företag. Till följd av detta har emissionsvolymen av företag med lägre kreditvärdighet eller utan officiellt kreditbetyg ökat. Dessutom har företagsobligationsmarknaden gynnats av historiskt låg realränta och en stark konjunktur. / Since the financial crisis 2008 banks have been more restrictive in their lendings to companies, leading to companies seeking alternatives funding through the capital markets.The development can be derived from the implementation of the new financial regulation (Basel III). In this paper, I analyze the Swedish corporate bond market. I investigate what is behind the strong growth and how the market may develop in the future. The thesis is based on interviews with people in the financial sector as well as previous reserach.In recent year, markets such as First North Bond Market and Räntetorget have been created with the aim of making the market more accessible to smaller companies. As a result, the volume of emissions of companies with lower credit ratings or without official credit ratings has increased. In addition, the corporate bond market has benefited from historically low real interest rates and a strong business cycle.

In the finance literature determinants of Capital structure have been widely debated. Previous studies have mainly focused on microeconomic determinants in countries outside Sweden and research on the Swedish market has been sparse. This study aims to analyze how microeconomic determinants such as profitability, firm size and tangible assets affect the capital structure and further how the determinants from the Swedish macroenvironment like inflation, tax rate and interest rate affect capital structure. The study considers previous theories on capital structures relevance and evaluates the Swedish firms support for the Irrelevance Theory, Pecking order and the Trade-off theory. In other words, by evaluating how the determinants affect the capital structure we were able to see connections between theory and how Swedish firms determine their financing decision.  Based on a review of the literature and theories, the determinants, the quantitative approach,  and collection method was decided. The data was collected over a 10-year period between  2010 - 2019 and amounted to 1116 firms and 44 632 observations. A multiple regression  method was performed where the dependent variable the debt ratio was split into short-term,  long-term, and total debt to get a better understanding of the results.  Analysis of the results demonstrated that Swedish firms' total debt ratio had a significant negative relation towards profitability. This indicates that Swedish firms choose to finance their operation with internal funds rather than with debt which supports the Pecking order Theory. However, the determinant growth show significant negative relationship to the  debt ratio which is in support for the Trade-off theory. The results imply Swedish firms conflicting support for theories on capital structure. Our results from a change in the  Swedish macroenvironment show that inflation causes firms long-term debt ratio to  decrease, which potentially demonstrates the fear of higher interest rates as inflation hits  and an unwillingness to finance with debt when the cost of financial distress increases.   Considering previous studies has shown contrasting results on the determinants effect on capital structure. We consider our findings to be in line with overall expectations and believe we add further knowledge which can be applied to the Swedish business environment.