The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Who will drive convertibles?

Demand for equity-linked issues remains strong but issuance has dropped off dramatically from 2003 levels. Bankers look to slowing stock markets later in the year to revive the sell side of the market.

PRIVATE-EQUITY SELLERS, investment bankers and corporations have been toasting the return of the IPO in 2004. But the biggest change in equity capital markets this year, the near disappearance of equity-linked issues, has gone largely unremarked.

Data from Dealogic show that the total volume of convertibles issued in Europe fell to e3.2 billion in the first quarter of 2004 compared with e10.9 billion in the previous quarter – a decline of nearly 70% – and e4 billion in the first quarter of 2003.

Equity-linked issues accounted for just 9% of equity capital market deals in Europe in the first quarter of 2004 compared with 26% in both the first and fourth quarters of 2003. This fall is even more marked than the increase in IPOs, which accounted for 19% of ECM deals in the first quarter of 2004 compared with 3% in the fourth quarter of 2003 and 4% in that year's first quarter.

It is somewhat surprising that so few chief financial officers have opted for equity-linked deals given the favourable primary market conditions and unsatisfied appetites of convertibles investors.

"Demand is undoubtedly very strong," says Tareen Hussain, head of convertible bond research at BNP Paribas.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree