Convertible Bond Issuance Near Record

New convertible bond bond issues have a chance to reach last year's record of $20.7 billion, while at the same there has been more than $1 trillion in high-grade bonds issued during 2012. One downside of convertible bond issuance is evidence that the announcement of a convertible bond generally has a negative effect on the stock price. When electronics company Sony announced its recent convertible issue, the stock price dropped 10 percent. And anecdotal evidence suggests that some stockholders sold stock and purchased the bonds even though the bonds were zero coupon bonds.