Record Run for Zero-Interest Convertible Bonds Hits a Wall

Over the past two years, investor demand for convertible bonds got so hot that bankers did something unprecedented: They sold nearly $57 billion of bonds that pay no interest, according to data compiled by

JPMorgan Chase

& Co.

Investors gobbled up convertible bonds with zero coupon from companies including

Airbnb,

SoFi,

Snap,

Ford,

DraftKings,

Twitter,

Shake Shack,

Spotify

and

Dish Network.

They were essentially lending the companies money at 0% interest, hoping shares would rise enough that they could convert their bonds into stock. But with higher interest rates coming, the reign of the zero-coupon convertible bond is likely coming to…