By Joy Wiltermuth
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:
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Ford Motor Co . /zigman2/quotes/208911460/composite F +2.21% $2.3 billion
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Airbnb Inc . ABNB $2 billion
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Spotify Technologies S.A. SPOT $1.5 billion
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Twitter Inc. TWTR $1.44 billion
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DraftKings Inc . DKNG $1.27 billion
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Coinbase Global Inc . $1.25 billion
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Beyond Meat Inc . BYND $1.15 billion
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AES Corp /zigman2/quotes/209256253/composite AES +2.22% $1.15 billion
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BlackLine Inc . /zigman2/quotes/200309738/composite BL +2.71% $1.15 billion
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Snap Inc . SNAP $1.15 billion
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