Record-Breaking Market Performance
The convertible bond market experienced unprecedented growth in Q3 2025, with issuance activity surging nearly 60% compared to the same period in the previous year. Gross proceeds approached $50 billion for the quarter alone, contributing to year-to-date totals of $132 billion that have already surpassed the full-year results for both 2021 and 2024.

Structural Innovation and Market Evolution
The convertible market showcased significant innovation through emerging patterns such as zero-coupon structures and dual-tranche issuances. These developments highlight the evolution of convertible financing as a strategic tool, with issuers securing growth capital under highly favorable terms while offering investors hybrid opportunities that combine equity upside potential with fixed income stability.

Mega Deal Phenomenon
The quarter was characterized by a wave of large-scale "mega deals" as issuers capitalized on favorable financing conditions. Notable billion-dollar transactions from major companies like Alibaba, Coinbase, and Nebius demonstrated the deep investor appetite for convertible securities, with these substantial offerings becoming a defining feature of the market landscape.

Regional and Sectoral Diversification
North America maintained its dominance in convertible issuance activity, while the Asia-Pacific region showed remarkable growth by nearly doubling its issuance from the previous quarter. The market demonstrated broad participation across sectors, with Technology, Industrials, and Financials leading the charge, indicating widespread adoption of convertible financing across diverse industries.

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Asia's convertible bond market achieved its strongest monthly performance ever in September, with the ICE BofA Asia Pacific Global 300 Convertible Index rising 13% compared to just 4.6% for the global benchmark. The rally was driven by investor excitement around artificial intelligence opportunities, with Alibaba Group's 2031 convertible note leading the charge with an impressive 28% gain during the month.

During the bull market of 2020-2021, companies like Beyond Meat, DraftKings and Airbnb issued zero-coupon convertible bonds, betting on rising stock prices. However, Beyond Meat's stock plummeted, leading to a painful restructuring where bondholders were offered a new bond with a 7% interest rate and equity stakes. This highlights the risks of such financial instruments, contrasting with other companies like DraftKings and Airbnb, whose bonds fared better.