Finanse, Rynki Finansowe, Ubezpieczenia

Purpose – the concept of “empty shell”, described by F. Black, involving the transfer of value by the shareholders from the companies – issuers of bonds fairly well characterizes many difficult cases that could be found on the Catalyst market in the first years of its development. The aim of this article is to identify and analysis dividend covenants. Design/methodology/approach – authors conducted a qualitative research of covenants contained in the conditions of bond issued during period of 2009–2013 and analysed structure of covenants applying statistical methods. Findings – the paper presents the areas covered by dividends covenants. They are compared with possible opportunities available to owners of companies – issuers of bonds. Finally it is shown that the mitigation of the value transfer risk through the threat of the activation of the put option (the right of investors to early requests to repurchase bonds) primarily includes reducing the dividend payments, and (rarely) limitation of buy back, which does not prevent from value draining. Authors show the lack of relations between level of debt (and profitability) and the use of direct dividend covenants. Originality/value – The paper concerns the problem neglected so far in empirical research in Poland, and at the same time very important from the theoretical and practical perspective.