Ferrovial’s USD 465m convertible bonds (CB) priced in November helped boost EMEA issuance volumes, a lift for institutional investor funds that had struggled after a lull in activity last year.

The deal, which was multiple times covered with c.80 lines, had a good cross-section of demand, with long-only investors taking a slightly larger share, an ECM banker said.

CB volumes stand at USD 11bn in 2025 year-to-date, up from USD 5.7bn in the same period last year.

This year’s volumes were boosted by several EUR 500m+ deals, including Vonovia SE (EUR 1.3bn dual-tranche) and Legrand S.A. (up to EUR 800m).

The Vonovia issue comprised two tranches of EUR 650m each, one zero-coupon and the other at 0.875% p.a., and was treated as a major revival benchmark given its investment-grade status and large size.

The Legrand offering was issued at 100% of face value, with coupons between 1.375% and 1.875% p.a. and an initial conversion premium of about 45%-50% above the reference share price.

Bankers treated both as bellwether trades that allowed long-onlys to re-enter the market on size, credit quality and clarity of conversion mechanics.

“The year has been pretty good in relative terms, better than last year, although not record territory, the banker said. “The mix of sizes and sectors helped the overall market and allowed long-only funds, who had struggled because of the dearth of activity, to raise new capital.”

This year saw some Covid-era convertibles coming up for redemption and some firms, such as Vonovia, rolled or issued new CBs in 2025. But several others decided to redeem in cash or refinance outside the convertible bond market, leading the total market to shrink.

“Heavy redemptions and refinancings led to a decline in outstanding paper, which in turn slightly depressed performance,” the banker noted.

Volumes in EMEA are still below those in the United States (USD 126bn) and Asia-Pacific (USD 40bn). This year’s improvement follows an almost existential 2024, when only a handful of deals were executed, raising concerns over the future of the convertible-bond market in Europe.

Despite what looked like supportive conditions, including elevated volatility and improving equity markets, CB issuance has failed to pick up in line with these more supportive conditions.

Many issuers remain deterred by dilution risk, weak investor appetite for credit-linked equity instruments, and corporates being well-financed after raising capital post-COVID.

But there is hope that at least a couple more deals could be executed before the year-end.

“I still think there is room for one or two more deals like Ferrovial—it’s a very easy trade for corporates to execute,” the banker said.

Additionally, sources previously estimated EUR 4bn-plus of EMEA CBs maturing in 2026, with a visible refinancing pipeline building across commercial real estate and industrial names. Conditions could turn more favourable next year if expected rate cuts materialise and refinancing pressure forces issuers back to market.