Introduction
The 2024-2025 convertible bond boom drove global issuance to a 24-year high of approximately $167 billion in 2025, the strongest year for the product set since the pre-financial-crisis era. The boom was driven by three converging structural forces: AI hyperscaler capex funding (with CoreWeave alone pricing a $2.25 billion convertible in December 2025 plus a $3.5 billion 2026 offering, both at 1.75 percent coupons), crypto-treasury accumulation (Strategy/MicroStrategy raised $8.2 billion through convertible debt entirely for Bitcoin purchases, including a $3 billion zero-coupon issuance in November 2024 and a $2 billion zero-coupon issuance in February 2025), and refinancing of the substantial COVID-era convertible cohort coming due in 2025-2027. The convertible market's revival has produced one of the most distinctive 2025 ECM phenomena and is a structural input into the 2026 outlook, with RBC forecasting $80 to $100 billion of US convertible issuance in 2026 and continued elevated activity expected across multiple subsequent years.
The Three Structural Drivers
Three forces converged to produce the 2024-2025 convertible boom.
Driver 1: AI Hyperscaler Capex Funding
Hyperscalers and AI infrastructure providers funded an unprecedented capital expenditure cycle in 2025, with combined capex projected above $600 billion in 2026 against the $3 trillion AI data-center build-out anticipated through 2030. The funding scale exceeds what straight high-yield debt markets can absorb at attractive coupons, driving issuers toward convertibles where the embedded equity option compensates investors for credit risk and produces materially lower coupons.
CoreWeave illustrates the AI convertible pattern at scale. The company priced an upsized $2.25 billion convertible senior notes offering in December 2025 with the following terms: 1.75 percent coupon, 25 percent conversion premium (initial conversion price of approximately $107.80 per share against last sale of $86.24), maturity due 2031, and a capped call at 150 percent above the issuance price (cap of $215.60 per share). The initial purchasers had a 13-day option for an additional $337.5 million of notes. CoreWeave then priced a further $3.5 billion convertible offering in early 2026 at 1.75 percent coupon due 2032, demonstrating sustained issuance capacity for the leading AI infrastructure name.
Driver 2: Crypto-Treasury Accumulation
Strategy (formerly MicroStrategy), the self-styled Bitcoin treasury company, has raised $8.2 billion through convertible debt issuance entirely earmarked for Bitcoin purchases. The pattern includes a $3 billion zero-coupon convertible offering in November 2024 (due December 2029), a $2 billion zero-coupon convertible offering completed in February 2025 (due 2030, with proceeds used to acquire $1.99 billion of additional Bitcoin), and additional issuances throughout the cycle. Strategy's extreme implied volatility (often 80-100+ percent) makes the embedded conversion option exceptionally valuable to investors, supporting near-zero coupons that would be impossible for typical issuers.
A small group of crypto-treasury imitators (smaller-scale companies adopting similar Bitcoin or other digital-asset accumulation strategies) has joined Strategy in tapping the convertible market. The crypto-treasury cohort represents a distinctive 2024-2025 sub-segment with its own structural dynamics (extreme vol, near-zero coupons, perpetual preferred structures complementing the convertible issuance).
- Crypto Treasury Convertible
A specialized convertible bond structure used by companies that maintain digital asset treasuries (Bitcoin, Ethereum, or other cryptocurrencies) as a core capital-allocation strategy. The principal example is Strategy (formerly MicroStrategy), which has raised $8.2 billion through convertibles entirely earmarked for Bitcoin purchases. The structure works because crypto-treasury issuers have extreme implied volatility (often 80-100+ percent), making the embedded conversion option exceptionally valuable and supporting near-zero coupons. The crypto-treasury cohort is a distinctive 2024-2025 capital-markets sub-segment with structural characteristics different from typical convertible issuers.
Driver 3: COVID-Era Convertible Refinancing
A meaningful share of 2024-2025 convertible issuance was refinancing of the COVID-era convertible cohort issued in 2020 and 2021 at very tight spreads. Many of those original convertibles are coming due in 2025-2027, requiring sponsors and issuers to refinance into the current rate environment. The refinancing wave produces somewhat higher coupons than the COVID-era originals but still materially lower interest expense than refinancing into straight high-yield debt would deliver.
The 2025 Issuance Statistics
The 2025 convertible market produced specific volume and structural patterns.
Global and Regional Breakdown
| Region | 2025 Convertible Volume | Notes |
|---|---|---|
| US | $123.1 billion (40% YoY growth) | Driven by AI capex and crypto treasury issuance |
| Europe | Approximately $25 billion | 231% Y/Y growth in Q2 2025 (from $1.6B to $5.3B) |
| APAC equity-linked | $33 billion | Hong Kong and China at 64% of regional activity |
| Global | Approximately $167 billion | 24-year high |
Coupon and Premium Patterns
2025 convertible coupons averaged approximately 3.29 percent across the broad market, with material dispersion: high-vol issuers (CoreWeave, Strategy, premium tech names) priced at 0 to 2 percent coupons; mid-vol issuers priced at 2 to 4 percent; lower-vol issuers priced at 3 to 5 percent. Conversion premiums clustered at 25 to 45 percent for most issuers, with extreme cases (Cloudflare, Rubrik) reaching 45+ percent.
Sector Distribution
Technology (broadly defined to include AI infrastructure, software, fintech) dominated 2025 convertible issuance. Healthcare and biotech also contributed materially. Financial services, industrials, and consumer issuers added to the diversification, with sustainability-linked structures (Schneider Electric pioneer) emerging as a distinctive European sub-segment.
Megadeal Cohort and Monthly Peaks
The 2025 cycle was notable for both deal count and individual size: full-year totals reached $167.1 billion across 264 deals, with 17 deals exceeding $1 billion in H1 2025 alone (versus only 7 megadeals in all of 2024). June 2025 was the single most active month at $30.1 billion across 71 deals, the highest monthly sum recorded since the $36.4 billion / 92-deal peak in March 2021. The global outstanding convertible market value crossed $306 billion in August 2025, the first time above the $300 billion mark since 2020, reflecting both the new issuance and the embedded equity gains in existing positions.
2025 Asset Class Performance
The 2025 convertible cohort outperformed both broad equities and bonds, with full-year Sharpe ratios reported around 2.0 versus the historical average closer to 1.0. The asset class outpaced the S&P 500 in 2025 on a risk-adjusted basis. Convertibles' downside resilience was visible during the mid-2025 tariff-driven volatility window: global equities fell roughly 11 percent peak-to-trough while convertibles declined only about 4.5 percent, demonstrating the structural bond-floor protection that drives long-only allocator interest.
Notable 2025 Convertible Deals
Beyond CoreWeave and Strategy, several other 2025 convertibles defined the year.
Cloudflare's $2 Billion Convertible
Cloudflare priced a $2 billion convertible at a 45 percent conversion premium, one of the highest premiums in the market. The structure illustrated the strong-equity-story dynamic that lets premium technology issuers extract favorable convertible terms.
Rubrik's $1.15 Billion Zero-Coupon
Rubrik priced a $1.15 billion zero-coupon convertible at a 42.5 percent conversion premium. The zero-coupon structure produces no cash interest expense for the issuer while still capturing the equity-option value through the conversion premium.
Alibaba's HK$12 Billion Exchangeable
Alibaba issued approximately HK$12 billion (about $1.53 billion) of zero-coupon exchangeable bonds due 2032, exchangeable into shares of its listed subsidiary Alibaba Health. The structure exemplified the cross-holding monetization use case for exchangeables in Asian markets.
Strategy's STRC and the Perpetual Preferred Suite
Strategy's perpetual preferred suite (STRK at 8 percent fixed dividend convertible, STRF at 10 percent cumulative non-convertible, STRD at 10 percent non-cumulative non-convertible, STRC at variable cumulative with compounding mechanic) has cumulatively raised tens of billions in 2025 alongside the company's traditional convertible activity, representing one of the most distinctive 2025 capital-markets episodes.
The 2026 Outlook
Multiple bank forecasts and structural factors support continued elevated 2026 convertible activity.
Q1 2026 Record Start and 2026 Forecasts
Q1 2026 US convertible issuance reached approximately $53.3 billion (more than double the same period in 2025), with the $13.6 billion mid-February milestone representing a 556 percent year-over-year increase versus that point in 2025 and signaling that 2026 may match or exceed the 2025 record. RBC forecasts $80 to $100 billion of US convertible issuance in 2026 in its base case, with Goldman Sachs leadership suggesting full-year activity could match or exceed 2025 if AI-linked deals (potentially half of total volume when energy and utilities are included) sustain their early-year pace. The forecasts assume continued AI capex demand, sustained crypto-treasury issuance, and continued refinancing of remaining COVID-era convertibles.
JPMorgan's AI Capex Projection
JPMorgan projects approximately $300 billion of AI- and data-center-related debt issuance per year for the next five years, of which the convertible product is positioned to capture a meaningful share given the underlying issuers' equity volatility making the structure economic.
Continued Refinancing Pipeline
The COVID-era convertible refinancing pipeline extends through 2026 and into 2027, providing sustained demand for new convertible structures as the original issuance cohort works through its refinancing cycle.
Sustainability-Linked Continued Growth
The Schneider Electric template for sustainability-linked convertibles is expected to spread across European corporate issuers in 2026, with continued growth in the broader sustainability-linked bond market (approximately $35 billion annual issuance globally with the convertible share growing).
The 2024-2025 convertible boom above is one of the most distinctive 2025 ECM phenomena. The next article walks through the Hong Kong IPO surge, where HKEX captured the global #1 IPO ranking in 2025 for the first time since 2019.
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