making a thoughtful business decision

Convertible bond issues rebound with large firms seeking to raise capital

The Globe and Mail
October 31, 2023.

Diana Orlic, Portfolio Manager, Wealth Advisor, Investment Advisor at Richardson Wealth, shares that amid higher interest rates, convertible bonds offer companies a cheaper way to raise capital. That’s because of their lower coupons, which can be a few hundred basis points lower than investment-grade corporate bonds.

“Convertibles’ greatest growth potential can emerge after a rout in stocks, providing risk-adjusted equity exposure with the “hedge,” if prices do not rise, of income and principal protection. The client can win either way.”

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