Record $38.7B Hybrid Bond Issuance as Coupons Drop Below 3.5%
Global hybrid bond issuance climbed to a record $38.7 billion in the first quarter, with average coupons falling under 3.5% as companies chase cheaper funding. Consumer staples and telecom giants led the surge, issuing perpetual securities to bolster capital structures at minimal cost.
1. Unprecedented Hybrid Bond Volume
Issuance of hybrid bonds reached $38.7 billion in the first quarter, surpassing previous highs as firms capitalized on historically low yields. Volume grew 45% year-over-year, driven by favorable funding conditions in global credit markets.
2. Attractive Pricing and Issuer Motivations
Average coupons on perpetual debt dipped below 3.5%, prompting consumer staples and telecom companies to reinforce balance sheets and manage leverage. Issuers cited the opportunity to lock in long‐dated, equity-like financing while preserving investment-grade ratings.