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.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Why European equity-linked isn’t what it used to be

European vanilla convertible bonds just cannot shake the blue funk they are in, even as other regions power ahead. Non-dilutive and synthetic structures have kept bankers busy, but they don’t suit everyone

This year’s convertible bond issuance in the US and in Asia has just surpassed 2017's. Both regions look on track to set 10-year records. But in EMEA the story couldn’t be more different. Volumes in the region are just 43% of last year's total – and are down a third from where they were at this point in the year.

The simplest explanation for the regional divergence is rates. “In Europe we just haven’t had the same level of imperative for issuers to look at convertible bonds,” says Tom Swerling, head of the Europe and Middle East equity solutions group at Barclays.

And with good reason: five-year swap rates in euros have been basically flat over the last 12 months, ticking up briefly to about 50 basis points but now at about 25bp to 30bp.

Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to and analysis and receive expertly-curated updates direct to your inbox.


Already a user?

Login now


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