Convertible Bonds: An Issuer’s Guide (2025)

Our Convertible Bonds guide has been updated to include a discussion relating to European and US issuers. This guide is intended to assist the treasury teams and in-house lawyers of corporate borrowers to assess the merits of convertible bonds as part of their funding programs and to better understand their terms, the timetable and related documentation.

The convertible bond market has been active as companies refinance converts issued during the pandemic. Driven by a high interest rate environment and ongoing macroeconomic uncertainty, companies issued over $86 billion in convertible bonds in 2024. Issuers turn to convertible securities as a strategic liability management tool, benefiting from lower interest costs relative to traditional debt and reduced dilution compared to equity. The increase in activity is expected to continue as many companies are now considering refinancing expensive debt like term loans and high yield bonds with convertible debt and refinancing convertible debt with new convertible debt (this addresses upcoming maturities and extends out maturities).