What’s driving Europe’s hybrid bond resurgence

Author: Danielle Myles | Published: 7 Feb 2013

The flurry of hybrid bonds issued by European corporates last month featured greater interest payment optionality, leading to more favourable rating agency treatment.

This feature, along with upcoming refinancings of pre-crisis hybrids, is tipped to continue the momentum behind corporate hybrid bonds – an instrument traditionally dominated by banks and insurers but gaining renewed traction with European corporates.

Two of January’s most notable offerings have come out of France: EDF’s record-breaking €4 billion deal and Veolia’s €1.3 billion deal.

“The relatively unusual feature of these two deals is that in addition to receiving equity treatment for accounting purposes, they are also eligible for...