The comeback of corporate hybrids

Boost in products being issued

With September now behind us, colder mornings and darker nights approaching, it seems an opportune time to take stock of how the primary market reopened this year after its traditional summer lull, writes Gordon Shannon, portfolio manager at TwentyFour Asset Management.

For us, one of the standout developments has been the re-emergence of corporate hybrid bond issuance. We have seen little new supply in this part of the market since 2015, when several utilities companies came to the market, but as chart 1 shows (see below), we have already seen more issuance year-to-date in Europe than the totals issued in both 2016 and 2017. TwentyFour AM makes raft of hires including head of US business Credit ratings One theory for this change is issuers are beginning to care more about their credit ratings. Because hybrids act as a partial equity injectio...