Market sees rise in sale of convertible bonds by big companies
At $43bn, techno stocks including Twitter lead largest sale of the convertible securities since 2008 financial crisis
Companies are on pace this year to sell the most bonds that convert to equity since the financial crisis, an indication that investors still see potential for big gains in risky companies even as debate intensifies on the direction of the economy. Companies including Twitter, Sempra Energy and Akamai Technologies had raised almost $43bn in convertible bonds by Friday. That figure is on pace to beat 2014’s $44.1bn ,which was the most since 2008, according to Dealogic. The growth has been particularly acute among technology companies, one of the market’s hottest sectors until recently, and issuing $22.5bn, a fraction of the nearly $170bn raised in high-yield bonds or the roughly $430bn in leveraged loans. Still, some analysts said the rise in convertible-bond sales shows the appeal of investments that give investors a way to benefit from gains in risky assets while mitigating the potential for losses. Convertible bonds, which grant investors the right to swap their securities for equi...
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