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May 21, 2021, 2:16 p.m. EDT

Why companies like crypto platform Coinbase are issuing a torrent of convertible bonds

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By Joy Wiltermuth

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Fixed income returns /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y 0.00% have remained low for quite a while, even before the Federal Reserve cut policy rates to near zero last year and restarted its bond buying program.

But King noted that Columbia’s fund produced a roughly 48% return in 2020, or about 4.5 times its long-term normal, which was “virtually all because of recovery plays” and highflying technology stocks that soared to new highs during the pandemic, like Tesla Inc . /zigman2/quotes/203558040/composite TSLA +4.68% , which has issued convertible debt.

“Our market is a very unruly market,” King said, underscoring that while only about 40% of the market’s bonds actually convert by hitting their target price, bond defaults also have been low in the 1.5% range.

“It’s a lot lower than people might think,” he said of defaults. “It’s also well below a classic high-yield bond.”

Year’s biggest converts

So which companies have been issuing convertible bonds? Here’s Dealogic’s top 10 biggest U.S. convertibles (rounded amounts) this year:

  • Ford Motor Co . /zigman2/quotes/208911460/composite F +2.21% $2.3 billion

  • Airbnb Inc . ABNB $2 billion

  • Spotify Technologies S.A. SPOT $1.5 billion

  • Twitter Inc. TWTR $1.44 billion

  • DraftKings Inc . DKNG $1.27 billion

  • Coinbase Global Inc . $1.25 billion

  • Beyond Meat Inc . BYND $1.15 billion

  • AES Corp /zigman2/quotes/209256253/composite AES +2.22% $1.15 billion

  • BlackLine Inc . /zigman2/quotes/200309738/composite BL +2.71% $1.15 billion

  • Snap Inc . SNAP $1.15 billion

/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
2.84
0.00 0.00%
Volume: 0.00
Aug. 12, 2022 5:10p
loading...
/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 900.09
+40.20 +4.68%
Volume: 26.55M
Aug. 12, 2022 4:00p
P/E Ratio
108.41
Dividend Yield
N/A
Market Cap
$940.14 billion
Rev. per Employee
$676,463
loading...
/zigman2/quotes/208911460/composite
US : U.S.: NYSE
$ 16.18
+0.35 +2.21%
Volume: 53.18M
Aug. 12, 2022 4:04p
P/E Ratio
5.63
Dividend Yield
3.71%
Market Cap
$65.05 billion
Rev. per Employee
$808,891
loading...
/zigman2/quotes/209256253/composite
US : U.S.: NYSE
$ 24.89
+0.54 +2.22%
Volume: 4.13M
Aug. 12, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
2.54%
Market Cap
$16.62 billion
Rev. per Employee
$1.39M
loading...
/zigman2/quotes/200309738/composite
US : U.S.: Nasdaq
$ 69.76
+1.84 +2.71%
Volume: 287,304
Aug. 12, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$4.16 billion
Rev. per Employee
$304,073
loading...

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