Just as equity-linked bankers are starting to get used to a
high profile, it seems it may be in jeopardy. Last year, as
convertible issuance shot up by more than 50%, their market
suddenly became mainstream. From being a product that contributed
between 10% and 15% of the business of the equity capital markets
divisions of most banks, in 2001 it accounted for more than a
third. But a quieter than expected start to 2002 is giving market
participants the jitters.
They're right to be nervous. Since the beginning of the year,
investors have had a very rough ride. January and February have
been painful months, with equity valuations down and bond spreads
widening on the back of a steady flood of negative news.
All of this means that they're demanding proper payment in return
for the risks taken on. In the convertibles market that involves
increasingly high bond...
