News Digest: US companies target convertible bonds
January 27, 2023
Fundraising activities in Wall Street’s main equities market have hit their lowest levels for more than three decades, forcing US companies to seek out convertible bonds as a means of financing their businesses, says a recent report.
Financial market data provider Refinitiv said December proved to be the busiest month of 2022 when it came to issuance of convertible bonds by deal count. This was a result of activity picking up in the second half of the year, where US companies raised more than double of what they did in the first six months.
Rising interest rates and extreme volatility made 2022 among the worst years for stock market listings in the US since 1990. Now experts believe that it would take at least another quarter for the IPOs to start picking up. However, steady valuations and encouraging inflation data have prompted activity in less-risky deals, especially via sales of convertible bonds.