The Street – Hedge funds that practice convertible arbitrage continue to bleed assets and remain one of the poorest performers of any category this year. But here’s a secret, according to a hedge fund manager: Convertible issuance is back.
Convertible financings have rebounded because interest rates are up and it costs less for companies to issue these stock-and-bond hybrids than traditional corporate paper. Also, while companies may be sitting on a lot of cash, they’ve still found uses for borrowed money in the area of share buybacks, acquisitions, and to fund research and development
