Europe’s Top Rated Firms Are Fans of Convertible Bonds Again

Investment grade companies are dominating the revival of Europe’s convertible bond market.

Firms including Euronext NV, Iberdrola SA and Deutsche Lufthansa AG have raised more than $10 billion so far this year across Europe, the Middle East and Africa, lifting equity linked deal volume from last year’s record low, according to data compiled by Bloomberg.

Convertibles from investment grade issuers typically offer lower returns than bonds offered by issuers with so-called junk ratings. Specialist investors in the asset class are still snapping up deals from highly-rated names, reflecting the strong appetite for new paper.

“In Europe we usually ...