For a few months last year, the convertible bond market almost broke down completely. But stronger equity market performance and the prospect of rising interest rates have given bankers cause to hope convertible issuance will accelerate in 2011.

Convertible bonds, a form of equity-linked debt, offer investors the option to exchange debt issued by companies for equity at some point in the future, paying for that privilege by accepting a reduced interest rate during the life of the bond compared with equivalent straight bond coupons.