The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

The day of the hybrids: Is the flowering corporate market as attractive as it seems?

Corporate hybrids are booming, thanks to surging appetite from investors in Asia and Europe – and potentially even the US. These deals offer a great pick-up over anaemic senior spreads. But are buyers turning a blind eye to the risks in their hunt for yield?

Christmas came in January this year for the European corporate hybrid bond market. That was when state-controlled French electricity utility Electricité de France (EDF) raised €6.2 billion in hybrid capital, smashing the previous €3.2 billion issuance record set by General Electric in 2007. Not content with the €4 billion it raised in euros and sterling, EDF subsequently raised €2.2 billion-equivalent non-call 10 from the US dollar 144a market – a vast pool of potential investors that has thus far been largely untapped by corporate hybrid issuers. The dollar tranche was arranged by Bank of America Merrill Lynch, Credit Suisse, Goldman Sachs and Nomura, and the euros and sterling by HSBC, Citigroup and BNP Paribas.

EDF group chief financial officer Thomas Piquemal described the blowout transaction as "providing flexibility in financing our industrial strategy while achieving a lower cost of capital". In the transaction, which came hot on the heels of French environmental services firm Veolia Environnement’s €1 billion and £400 million deals earlier that month, $3 billion was issued at 5.25% for 10-year non-call; €1.25 billion at 4.25%

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree