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Favourable financing environment sees growth in convertible bond issuance
Transaction volume for convertible bonds issued by listed European property companies rose to just under €1.5 billion in H1 2014, more than double the same period last year. Property companies accounted for around 16 percent of total convertible bond issuance in the period to end-May; a total of some €9.2 billion was raised across 35 issues. Last year, according to Société Générale, total European issuance was €24 billion across 72 issues. The principal markets are France (16 percent) and Germany (21 percent).
Convertible bonds are currently favoured by property companies as they offer advantages over other financing mechanisms, especially for refinancing of existing loans. Ralf Darpe, head of equity capital markets and co-head of corporate finance for Germany, Austria and Switzerland at Société Générale, comments that convertible bonds continue to play a major role for prope