The role of time value in convertible bond call policy

► We propose a new measure to explain the optimal call policy for convertible bonds. ► This measure is based on the extraction of time value from the conversion option. ► Survival analysis shows that net time value advantage is the most important factor. ► The new measure effectively quantifies the loss deriving from a delayed call. ► Delays are motivated by refinancing cost, information asymmetry, tax and leverage.