CBs as a safe haven

CBs offer safe haven for uncertain investors

Convertible bonds offer a good hedge against uncertainty at current valuations, according to Lombard Odier.

Investors still unsure about the outlook for global growth are turning to convertible bonds CBs as a way to address the continued market volatility, according to Nathalia Barazal, head of convertible bonds management at Lombard Odier.

The global CB market is worth around $516 billion, with roughly 45% of issuance in the US, 25% in Europe and only 16% in Asia. Not surprisingly, 70% of CBs come from large-cap companies. Around one-third of all CBs are investment grade, while around 41% have been issued by unrated companies.

CBs are an equity investment with the protection of bonds, said Barazal, speaking at a briefing this week. “In...

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