Equity-linked: Convertibles’ Atlantic drift
Although convertibles have failed to inspire issuers in Europe, thanks partly to modest volatility and unfavourable accounting rules, the product has been a smash hit in the US, where companies have been embracing the instruments as a means to repurchase shares.
Annual volume rose in the US by 80% in 2006 to $71.3 billion, according to figures from Dealogic, and convertibles’ share of total ECM issuance rose to 33%, up from 23% in 2005.
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