US convertible bond issuance has kept its footing through the summer months, setting the stage for an active September as issuers exit earnings blackouts and investors prepare for a new wave of supply.

July saw steady US deal flow despite a seasonal slowdown, according to Ivan Nikolov, portfolio manager at Fisch Asset Management. “It has been reasonably active for a month that usually goes quiet,” he said, noting an “exceptionally strong” second quarter.

Equity-linked bond issuance hit USD 40.15bn in 2Q25, Dealogic data show, marking the highest quarterly total since the pandemic-driven spike of 2Q20. It more than doubled the USD 17.95bn raised in 1Q25 and topped full-year levels seen in some post-COVID years.

As of early August, 3Q25 issuance stands at USD 7.92bn. Nikolov considered this as a pause rather than a shift in sentiment. “With earnings out of the way and the blackout window ending, we’ll see more names come through in September,” he said.

May and June brought a flurry of well-received deals across technology, software, and select investment-grade names, said Bryan Goldstein, managing director at Matthews South. “A natural break followed as companies went into blackout,” he said. “I expect it to pick up again, but not necessarily at the same aggressive pace.”

The largest US convertible offerings of 2025 so far include DoorDash’s USD 2.75bn issue, GameStop’s USD 2.7bn, KKR’s USD 2.59bn, Super Micro Computer’s USD 2.3bn, and Cloudflare’s USD 2bn, according to the data. These transactions were buoyed by strong equity momentum and solid investor demand, helping issuers secure favourable terms.

Beyond large-cap tech and finance, non-tech names also have solid followings. CenterPoint Energy, for example, priced a 3% coupon in 2Q25, down from 4.25% on its previous issuance three years ago, with improved investor appetite for defensive sectors.

Goldstein added that investor engagement remains healthy. “When you have momentum and the right mix of accounts in the book, it creates a constructive environment for pricing,” he said.

The refinancing of convertibles sold in 2020 and 2021, most with five-year maturities, continues to drive deal flow.

A confluence of factors ranging from supportive investor sentiment to strong equities have allowed certain issuers to refinance with lower coupons while the US Fed Fund Rate has risen to 4.25%-4.50% from a range of 0%-1.25% during 2020-2021.

More than half of the new paper in 1H25 was used for debt repayment, said Frank Timons, CEO of Pier 88 Investment Partners, who described the strategy as both defensive and opportunistic. “CFOs are taking out more expensive debt and replacing it with paper that’s more flexible and cheaper on the coupon,” he said.

While refinancing dominates, several opportunistic raises have also hit the tape, sources said, with some issuers tapping the CB market to support expansion plans despite having the cash to fund them.

The post-Labor Day period is expected to bring a fresh wave of issuance, with bankers tracking multiple potential launches from large-cap and repeat issuers.

Nikolov pointed to large 2020-era maturities still due before year-end as another catalyst for issuance. Goldstein noted that the legal and operational groundwork put in place by previous CB offerings allows repeat issuers to move quickly once market windows open.

The equity backdrop remains supportive, with stocks near recent highs and volatility contained.