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Convertible bonds gain global momentum amid AI boom

Heather Ng
A global AI infrastructure spending boom is driving record convertible bond issuance, prompting institutional investors to increasingly embrace the hybrid asset class.
Convertible bonds gain global momentum amid AI boom
Key Points
  • Convertibles have become popular multi-asset instruments for global sovereign wealth funds, pension schemes and insurers.
  • A global AI-fueled capital expenditure boom drives high issuance across the US, Europe and Asia, though valuations remain a point of debate.
  • Mature hedge fund arbitrage provides deep liquidity, while the market balances low-interest rate support against potential valuation corrections.

The global convertible bond market has entered a new phase of expansion in 2026, driven by issuer financing needs and investor strategies that are reshaping allocation across asset classes.

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