October 28, 2022
Hybrid bonds pose dilemma for borrowers and debt investors
By admin | |
Hybrids do not affect credit ratings and they offer higher yields to investors. They have been used by energy companies. EDF has €13bn in hybrids outstanding. When they mature, issuers can repay them and issue new ones, or roll them over. Rising interest rate make the latter more likely, but that will make investors less likely to buy hybrids in future.