Half of the issues in the European convertible bond market will not convert into the underlying equity unless share prices more than double, according to new research from Lehman Brothers.

This increases the redemption risk for issuers as investors will choose to take cash rather than equity when a bond matures and companies will have to find some way of refinancing the payment. Some convertibles also have options which allow investors to "put" the bond for early redemption to the issuer at certain future dates at a specific price, or yield.