The Focus
As a security class, the capital raised through convertibles in the last few years has sharply increased. $124B has been raised by convertibles in the US so far this year, already outpacing the record $123B raised in FY2025. In 2016, 11% of the ECM capital raised in the US came via convertibles, by 2025 that had increased to 30%. Where has this uptick in convertibles come from?
The Graph
The Breakdown
Convertible bonds are not a new security type but historically in the US have been confined to more early-stage investments. In recent years however, there has been a steep increase in issuance across sectors, in 2016 the most prolific sector was healthcare but in 2026 YTD healthcare now ranks third behind tech and communications. This has occurred alongside an increase in the size of convertibles too, with the average amount raised topping $1B for the first time in the US in 2026 YTD.
A factor likely contributing to this uptick in convertible bond volume is that for issuers, with the current US fiscal outlook, convertibles typically carry lower coupons relative to traditional debt instruments while managing dilution risk. The cost of financing is relevant for firms looking to undertake cash-intensive strategies such as expansion of manufacturing centres or shoring up supply chains. The average coupon for a US convertible in 2026 is 2.3% and nearly a third of US convertibles issued so far this year were zero-coupon, that’s notable for an issuer when you consider the coupon on traditional corporate debt currently hovers around 4-7%.
“During a record year for convertibles issuance, CMG’s data allows practitioners to better analyze convertibles by placing them within the broader landscape of ECM transactions available on our platform, using our live issuance monitoring, deal-level terms and capital structure context to support ECM analysis.”
– Mitch Newman, SVP, Head of Global Sales, CMG
With geopolitical uncertainty and an ECM uptick concentrated in certain sectors, notably within AI, a broader range of firms are turning to convertibles as a potential source of funding. For example, multiple convertibles issued in 2026 have been by firms involved in AI expansion as well as firms operating in the broader ecosystem such as data centre infrastructure. Convertible issuance in 2026 has already outpaced full-year 2025 levels, marking a second consecutive record year.
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