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.
Opinion

The next big thing in emerging markets?

Bankers reckon convertible bonds will be a product to watch in the developing world.

With margins shrinking in traditional capital-raising areas in the emerging markets, banks have to look farther afield to make money. One product that is beginning to whet bankers’ appetites is convertible bonds.

The instrument is not new to the emerging markets, but historically issuance has been spotty. In India and Taiwan, for example, convertibles are a common tool for corporate and bank fund-raising. In emerging Europe and the Middle East, however, borrowers have been less willing to dip their toes in the convertibles water, and the product does not exist in Latin America.

There are signs that the situation is changing, especially in emerging Europe and the Middle East. Already this year a handful of deals have been priced out of the region, including transactions by Hungary’s Mol, Russia’s Mechel, Egypt’s Weather Investments and the UAE’s Dubai Ports World. Some transactions have been more successful than others but at least the indication is that the product is hitting corporates’ radar screens.

Certainly, the environment has never been more supportive for convertible bonds. With central banks tightening monetary policy, financial market volatility has returned. In addition, economic fundamentals remain strong in much of the region.

But the immediate spur to the growth in convertibles issuance is M&A activity.

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