Security Offerings Following the Covid-19 Pandemic: Do Traditional Corporate Finance Theories Still Hold?

We document substantial increases in corporate security offerings since the start of the COVID-19 pandemic. While the rise in seasoned equity offerings (SEOs) is attributable to shifts in macroeconomic conditions, convertible and straight bond offering increases cannot be explained by standard security choice determinants or government interventions. We also find that COVID-period SEO announcements are often contaminated by positive R&D-related news, with COVID-period offering proceeds more likely to be hoarded as cash. Overall, COVID-period SEOs are consistent with market timing behavior, whilst COVID-period convertibles and straight bonds cannot be reconciled with pre-pandemic rationales. New theories may be needed to explain corporate financing decisions following long-lived multidimensional shocks.