Why convertible bond issues are all the rage this year

Posted on 8 Dec. 2020 at 8:15

Accor last week, Schneider Electric mid-November, EDF in September, Safran, Wordline and STMicroelectronics in June, Neoen and ArcelorMittal in May … The list of French groups that have issued convertible bonds this year is long . So long that the amounts collected by these financial instruments have reached record levels. Since January, 8.2 billion euros have been raised in this way, against 4.8 billion over the whole of 2019. The enthusiasm is identical in other European countries, with 25.2 billion euros raised against 17, 5 billion last year. Amadeus, Cellnex, Nexi, Zalendo, Just Eat,, HelloFresh have all resorted to this type of financing.

These hybrid products are halfway between a bond and a stock. As a bond, they protect against the risk of loss if the stock market is bearish, and if not, they allow part of the rise in the security to be captured.

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