Global convertible bond issuance reached $78.2 billion in 2025, the highest level since 2001, driven by record investment in artificial intelligence infrastructure and technology firms. The surge reflects strong demand from growth-oriented investors seeking equity-like returns with downside protection.
- Global convertible bond issuance reached $78.2 billion in 2025, the highest since 2001.
- AI-related sectors accounted for 45% of new convertible deals, up from 20% in 2023.
- Average deal size exceeded $1.2 billion, with 60% of transactions priced in USD.
- Firms in semiconductor, cloud infrastructure, and enterprise software led issuance.
- Average yield to maturity was 3.4%, down from 5.7% in 2020.
- European and Asian issuers represented 23% of total global volume.
Convertible bond issuance surged to $78.2 billion in 2025, marking the highest annual volume since 2001 and a 37% increase from the prior year. This historic peak coincides with a broad acceleration in capital expenditure by technology companies focused on AI development, including semiconductor manufacturers, cloud infrastructure providers, and enterprise software firms. A significant portion of the issuance came from U.S.-based tech startups and mid-cap innovators, with over 60% of deals priced in USD and issued under Rule 144A or Regulation S frameworks. The spike in demand for hybrid securities stems from investors’ appetite for growth exposure without the full volatility of common stocks. Convertible bonds offer a fixed income component with the option to convert into equity at a predetermined price, making them particularly attractive during periods of technological disruption. Major underwriters, including JPMorgan Chase & Co., Goldman Sachs Group Inc., and Morgan Stanley, led 22 of the top 25 deals by size, with average deal sizes exceeding $1.2 billion. Key metrics highlight the shift: companies in the AI, robotics, and data analytics sectors accounted for 45% of all new convertible issues in 2025—up from 20% in 2023. The weighted average conversion premium across new issues was 28%, slightly below the 30-year historical average, suggesting market confidence in near-term equity upside. Meanwhile, the average yield to maturity for new convertibles stood at 3.4%, significantly lower than the 5.7% average in 2020, reflecting tighter credit spreads and elevated risk appetite. Market participants note that the trend is not limited to North America. European and Asian issuers, particularly in Germany’s industrial automation sector and South Korea’s semiconductor industry, contributed 23% of the global issuance volume. As AI adoption expands across healthcare, finance, and logistics, convertible financing is emerging as a preferred tool for scaling innovation without immediate dilution to existing shareholders.