This chapter explores the convertible bond market, its size and distribution globally, and its attractiveness for tech companies during the pandemic. It also discusses the advantages of zero coupon convertible bonds and the potential benefits for investors.
It’s kind of debt, and kind of equity. It’s been around for decades, but has recently come back into fashion.
What is it? It’s convertible debt.
Convertible bonds are a clubby and often overlooked corner of the corporate finance world. Last year, plunging equity valuations made for some notable horror stories — like Peloton, Ocado and Affirm — but in recent months the market has become popular once again.
For this week’s episode of Cloud 9fin, our US managing editor Will Caiger-Smith sat down with David Hulme of Advent Capital Management (whose president, Tracy Maitland, wrote a book on converts) to get the lowdown on the asset class’s resurgence.