INVESTORS FLOCK TO HYBRID SECURITIES HYBRID SECURITIES

摘要

Declining yields on every front have made riskier forms of debt more attractive to fixed-income investors, with hybrid securities a major beneficiary. Yet while primary markets for both corporate and financial hybrids have been booming, they remain vulnerable to any return of risk aversion. Bank hybrid issuance was on hold until the latter part of 2013, at least in Europe, while details of the new regulatory regime were finalised. So it was corporate hybrids that began to seriously engage the attention of investors, and therefore issuers, in the course of 2012. And then 2013 turned into a blowout year. Corporate treasurers like hybrid securities because, being equity-like, they allow companies to defend their senior ratings and raise capital without diluting shareholders. They also tend to be cheaper to issue than a combination of equity and debt. The trouble was that large corporates could never issue in sufficient size to 'move the needle', as they liked to say.