US Edition — Preaching to the unconverted

<p>It’s kind of debt, and kind of equity. It’s been around for decades, but has recently come back into fashion.</p><p>What is it? It’s convertible debt.</p><p>Convertible bonds are a clubby and often overlooked corner of the corporate finance world. Last year, plunging equity valuations made for some <a href="https://www.bloomberg.com/news/articles/2022-06-16/tech-bear-market-hammers-pandemic-era-debt-to-distressed-levels?sref=CVntr6Fy">notable horror stories</a> — like <strong>Peloton</strong>, <strong>Ocado</strong> and <strong>Affirm</strong> — but in recent months the market has <a href="https://www.ft.com/content/e2d04d7a-f55b-4ca6-b5a9-b8fc40d8be29">become popular</a> once again.</p><p>For this week’s episode of <em>Cloud 9fin</em>, our US managing editor Will Caiger-Smith sat down with David Hulme of Advent Capital Management (whose president, Tracy Maitland, <a href="https://www.amazon.com/Convertible-Securities-Investment-Corporate-Strategies/dp/1260462900">wrote a book</a> on converts) to get the lowdown on the asset class’s resurgence.</p>