US Convertible Bond Issuance Hits $57 Billion, Set to Top 2025's $120 Billion Record
Updated
Updated · Financial Times · Jun 2
US Convertible Bond Issuance Hits $57 Billion, Set to Top 2025's $120 Billion Record
3 articles · Updated · Financial Times · Jun 2
$57 billion of US convertible bonds have been issued so far in 2026, the fastest pace on record for this point in the year and enough to put annual volume on track to surpass 2025's $120 billion high.
AI-linked companies are driving the surge as soaring share prices and stock volatility let them sell debt with very low or even zero coupons while setting conversion prices 75% to 100% above issuance levels.
Recent deals show the funding advantage: CoreWeave sold $3.5 billion of converts at 1.75% after issuing senior notes at 9.75%, while Akamai raised $3.5 billion and ON Semiconductor $1.3 billion at 0% coupons.
Convertible arbitrage hedge funds have helped absorb the wave of supply, buying the bonds and shorting the underlying shares to profit from volatility while limiting downside through the bond structure.
The market is increasingly funding AI infrastructure and secondary beneficiaries with weaker cash flow, while cash-rich hyperscalers largely stay out because they can finance expansion internally.
With AI firms monetizing volatility for cheap debt, who bears the risk if the AI boom goes bust?
Is the AI convertible bond boom a smart financing tool or a hidden dilution trap for future shareholders?
Is the current AI bond frenzy simply a repeat of the dot-com bubble's financing playbook?
The 2026 US Convertible Bond Boom: Record Issuance, Tech Demand, and Investor Shifts
Overview
The US convertible bond market is experiencing an unprecedented surge in 2026, building on the strong momentum from 2025. This growth is fueled by a unique mix of market dynamics, including record-high issuance across sectors, a volatile yet opportunity-rich economic landscape, and the strategic advantages convertible debt offers to companies. Tech firms, in particular, are seizing this window of 'cheapest money,' driven by intense interest in artificial intelligence and strong demand from hedge funds and asset managers. As a result, convertible bonds have become a mainstream financing tool, marking a transformative period for both issuers and investors.