The biggest U.S. convertible bond issue in nearly two years confirmed that the asset class’s comeback is well underway, as companies seeking to lower the cost of their debt are rushing to beat the market’s looming holiday freeze, Bloomberg News reported. PG&E Corp. priced a $1.9 billion offering overnight after upsizing it from the initial $1.5 billion target, confirming a Bloomberg News report. The California utility company’s issue is the biggest in the U.S. since December 2021, according to Bloomberg calculations, when electric car maker Lucid Group Inc. raised $2 billion in convertible debt. The U.S. equity-linked volume seen in the two-year stretch at the beginning of this decade is unlikely to be repeated, with $104 billion raised in 2020 and $89 billion in 2021, data compiled by Bloomberg show. Still, the $51.3 billion total so far this year is nearly 73% higher than 2022’s full-year haul, and is set to grow further as investors warm to the assets once again. PG&E is already leveraging its freshly raised capital to refinance term loans, though it has downsized the proposed issue to $500 million from $750 million. The utility giant recently announced it will pay a dividend for the first time in about six years, as part of efforts to restore its financial health after emerging from bankruptcy.
