The ability to hedge out the credit risk of a convertible bond via an asset swap combined with market volatility in Japan over the past 12 months has led to a significant uptick in hedge fund investment into convertible bonds, say market participants.
Issuance of convertible bonds in Japan stands at $4.5 billion for the year to October, compared with $3.5 billion for the whole of 2012, of which $1.9 billion was in a single convertible issued by Sony, according to data provider Dealogic. The
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