High-grade US companies are piling into the convertible bond market — typically the preserve of junk-rated issuers — as they try to minimise rising borrowing costs caused by the Federal Reserve’s aggressive campaign of interest rate rises.

Investment-grade borrowers have sold $12bn of convertible bonds so far this year, more than 30 per cent of total issuance, according to data from Bank of America — the highest share in at least a decade and three times the average rate. Highly rated companies sold just $2bn of so-called converts in 2022, or 7 per cent of the overall market.

“We’re seeing a lot of companies who would traditionally be straight debt issuers come to the convertible market,” said Jesse Mark, global head of equity capital markets at Jefferies.