EDF Subordinated Perpetual Bonds - Electricite de France has issued the largest corporate hybrid bond to date. In a clear sign of the liquidity available in this segment, the print size of EUR4bn easily eclipsed the previous largest USD3.2bn deal from General Electric - which was issued in 2007 before the onset of the financial crisis. Last month was a record month for corporate hybrid debt. As a spillover of the "risk on" modus on the debt capital markets, corporates as well as FIs have been issuing subordinated debt. These instruments offer investors a higher yield than senior unsecured bonds. For banks, regulatory pressure to bolster capital has been driving much of the issuance. For corporates, such instruments can be viewed as equity by the rating agencies - thereby allowing corporates to maintain their rating whilst at the same time being tax deductible like any other bond. However, only certain types of corporates are suitable for this: utilities being the prime example. Electricite de France tapped the market this week with a benchmark issuance. Clifford Chance advised the Lead Managers.
Financial Centre : Paris
Law Firm : Clifford Chance
Lawyer : Cedric Burford
Practice Area : Debt Capital Markets
Classification : Corporate Bonds
Sub-classification : Subordinated Debt
Industry : Electricity
Advised Party : Lead Manager
Value : USD1000.01-5000.00 (equivalent)
Issuer Jurisdiction : France
Listing Jurisdiction : France
Editorial
07 Feb 2013 EDF Subordinated Perpetual Bonds
EDF Subordinated Perpetual Bonds - Electricite de France has issued the largest corporate hybrid bond to date. In a clear sign of the liquidity available in this segment, the print size of EUR4bn easily eclipsed the previous largest USD3.2bn deal from General Electric - which was issued in 2007 before the onset of the financial crisis. Last month was a record month for corporate hybrid debt. As a spillover of the "risk on" modus on the debt capital markets, corporates as well as FIs have been issuing subordinated debt. These instruments offer investors a higher yield than senior unsecured bonds. For banks, regulatory pressure to bolster capital has been driving much of the issuance. For corporates, such instruments can be viewed as equity by the rating agencies - thereby allowing corporates to maintain their rating whilst at the same time being tax deductible like any other bond. However, only certain types of corporates are suitable for this: utilities being the prime example. Electricite de France tapped the market this week with a benchmark issuance. Clifford Chance advised the Lead Managers.
Financial Centre : Paris
Law Firm : Clifford Chance
Lawyer : Cedric Burford
Practice Area : Debt Capital Markets
Classification : Corporate Bonds
Sub-classification : Subordinated Debt
Industry : Electricity
Advised Party : Lead Manager
Value : USD1000.01-5000.00 (equivalent)
Issuer Jurisdiction : France
Listing Jurisdiction : France