Global issuance of equity-linked notes hit the highest level since early 2021 in the quarter that just ended, as all three regions grew together (sequentially) for the first time in many moons, based on Dealogic data.

In the April-June period, global issuance totaled USD 46.16bn, more than double the previous quarter’s USD 22.85bn, while expanding 32.7% from a year earlier, according to Dealogic. All deals are categorized based on company nationality and a Rank Eligible basis. The latest quarterly reading also marked the asset class’s best showing since 1Q21’s USD 60.94bn.

“Global drivers include debt refinancing schedules and increased volatility of stocks which some companies look to monetise through the conversion options they effectively sell to investors,” said Ivan Nikolov, head of convertible bonds at Fisch Asset Management. “There are also multiple regional drivers including the currently lower Hong Kong interest rates, the removal of the short-selling ban in South Korea and the opportunistic issuance in Europe after a long hiatus.”

For the first half of 2025, global issuance hit USD 69.0bn, up 15% versus the same period last year at USD 59.85bn, according to Dealogic. 

On the investment-grade side, convertible issuance spanned European infrastructure and energy names like Vinci and Iberdrola, property heavyweights such as TAG Immobilien and Vonovia, and major Asian industrial and tech firms including LG Chem/LG Energy, Akamai, Sinopec, and Taiwan Cement, MFM Mirante, an asset management firm, said in a report in early July.

“With equities staging a solid rebound through May and June, we expect the primary pipeline to remain robust throughout the summer months,” MFM Mirante noted.

A strong revival of the asset class’s new issuance has grabbed attention from major investment banks.

In a 25 June report, BofA Securities noted that “global convertible bond new issuance ramped up meaningfully toward the end of the first half, as easing trade tensions have created an ideal backdrop to raise new equity-linked capital – tight credit spreads, rallying share prices and well-supported stock (volatilities).”

While refinancing of maturing pandemic-era convertible bonds comprised a meaningful chunk of the new volumes, a sizeable pickup of more opportunistic issuance also contributed to lift the primary market, according to the BofA report.

Dynamics wise, in Asia, the primary space has obviously switched toward an issuer market recently from investor-friendlier one earlier, market participants said.

This is typical of a bull market for primary issuance, said a fund manager in Hong Kong. A bull market, he went on, also attracts “tourist investors” who are atypical convertible bond buyers, such as equity fund investors.

“It’s a good thing that a majority of the names are (investment grade) names, though some are unrated, with some high-yield,” he said. He noted that, unlike last year, some of the deals have recently been considered opportunistic and could have been better priced.

Still, he rated the Asia new issuance market at eight to nine on a scale of one to 10.

The market has been as good as it gets in general. His book has returned over 10% year to date, on pace to catch up on last year’s 24%.

By region, the Americas remained the largest market, pricing USD 28.43bn worth of paper, nearly doubling the first quarter’s USD 14.33bn, or an advance of 55.3% from the year earlier’s USD 18.31bn.

Asia printed USD 11.44bn worth of convertible or exchangeable bonds in the quarter ended 30 June, a no-less impressive 71.2% rise from the first quarter’s USD 6.69bn, though it was off 21% from the USD 14.46bn a year earlier.

Europe made a vigorous comeback, with the second quarter’s USD 6.29bn coming in 3.4x the first quarter’s USD 1.84bn, or 3.13x the same period 2024’s USD 2.01bn.

The global balanced investment-grade convertible bond market delivered robust gains in the first half of 2025, with every region – except Japan – making a positive contribution, according to MFM Mirante.

The reference universe finished the period up roughly 8.10% in USD, 6.98% in EUR, and 5.84% in CHF.

The equity component drove most of the return, as the underlying stocks in the IG convertible universe rose 11.06% in local currencies versus a 5.32% gain for MSCI World.

The strong realised returns of the CB market should certainly support further issuance going forward as investors look for opportunities to recycle capital from maturities, said Nikolov.

“The momentum in US and Asian CB issuance is likely to persist into the second half of 2025 with more refinancing needs and region-specific catalysts,” he said. “As always, a complete market turmoil could likely break the trend; however, even in such extreme market conditions, the CB primary market rarely shuts completely as we saw recently.”

While partygoers should enjoy themselves while the good times roll, it’s everyone’s responsibility to ensure that if and when the song comes to an end, people can exit in an orderly fashion.

Global top 10 issuance in 2Q25