Credit risk-wary convertible bond investors demand covenants

Convertible bond (CB) investors are starting to make more demands of issuers as their outlook becomes more conservative and they have an increased awareness of credit risks, according to panellists at the SunGard Hong Kong City Day on May 6. Attitudes are also changing towards coupon payouts.

“Investors are starting to demand CBs with coupons, compared with before the crisis when the norm seems to be that all CBs get zero coupons,” said Wilkie Lai, chief risk officer at Tribridge Investment Part