Headline: Is this love, or a teenage crush? Source: Euromoney Date: July 2001 Author: Antony Currie The US primary convertible bond market has grown rapidly this year, providing low-cost funding to highly rated corporates at a time when other sources of capital are running dry. The market’s proponents claim convertibles have matured into a mainstream financing instrument. But the high degree of structuring suggests that many deals this year have been pure volatility plays sold to a new breed of hedge fund investors that might withdraw as quickly as they appeared.
That isn’t so surprising given the dire state of common-stock issuance this year, but $56 billion is just $5 billion short of US convertible issuance for the whole of last year. |