US Convertible Bonds Top Covid Record With $109 Billion Haul

US convertible bond sales have reached a record $108.7 billion year-to-date in 2025, surpassing the previous high of $105.6 billion set in 2020, driven by a recent surge in deals. This robust activity in the convertible market indicates strong demand, with bankers anticipating further volume increases by year-end.

Analysis

The US convertible bond market has achieved a record year-to-date volume of $108.7 billion in 2025, significantly exceeding the previous high of $105.6 billion set in 2020. This surge is attributed to a recent "fresh wave of deals," indicating robust issuance activity and strong market demand.

This record volume underscores a strongly positive sentiment within the credit and bond markets, particularly for hybrid securities offering equity upside with bond-like downside protection. The market's current trajectory suggests a sustained appetite for convertible financing, with bankers anticipating further increases in volume by year-end.

The optimistic tone and moderate-to-high market impact score associated with this trend suggest a favorable environment for both issuers seeking flexible capital and investors looking for structured products. This robust activity reflects broader market technicals and flows, potentially driven by attractive terms or specific issuer needs in the current economic climate.

Key Decisions for Investors

• Investors should assess the implications of this record convertible bond issuance on overall credit market dynamics and potential shifts in capital structures.
• Given the optimistic sentiment and strong demand, evaluate new convertible offerings for attractive risk-reward profiles, considering both the equity conversion potential and bond floor protection.
• Monitor the continued pace of issuance and underlying credit quality of new deals, as sustained high volumes could impact market liquidity and pricing for specific issues.