The race to fund AI has corporations raising capital across every market available to them, and a growing number are turning to the convertible bond. Issuance of convertibles set a record in 2025 and is running faster still this year, as companies weigh the lower coupons they offer against a potential obstacle: because investors can convert the bonds into stock at a preset price, a rising share price can dilute existing shareholders.

In this sponsored episode of NeuGroup's Strategic Finance Lab podcast , peer group leader Andrew Weber speaks with Raj Imteaz, head of convertible and equity derivative advisory at ICR Capital, to break down what's fueling the surge, how a treasury team can tell whether a convertible fits its balance sheet, and how to handle what can be a complex execution process.

Much of what's driving the boom, Mr. Imteaz says, is the enormous capital that high-performance computing and AI (HPC-AI) build-outs demand, pulling a widening set of issuers into a market long dominated by high-growth and tech names.

Against straight debt or equity, the pitch is straightforward: a far lower coupon than regular bonds, and much less dilution than an equity raise. But Mr. Imteaz is clear that a convertible is just a tool in the toolkit, not necessarily fit for every balance sheet. He unravels the intricacies of the capped call, also known as a call spread, an overlay companies buy to push out the point at which a rising stock creates new shares—essentially, an insurance policy to mitigate stock dilution.