S&P THROWS CURVEBALL TO IMPACT CERTAIN CORPORATE HYBRID ISSUERS - RATINGS CALLS LOOMING?
Veenay Chheda
Investment Banker | Strategic Thinking | Team Leadership | Stakeholder Management | Prudential Regulation | Advisory | Capital Structuring | Liability Management | Debt Restructuring | Developing Talent
Whilst everyone is focused on Moody’s positive hybrid capital changes in 2024, S&P threatens with a negative change to the asset class, attacking dynamic step-ups often used by lower rated issuers.
They have issued an “advance notice” of a Request for Comment” to come shortly to address this issue which could result in some hybrids losing their equity credit and potentially triggering a ratings call. In a nutshell, they have a concern with the timing of the second step-up if this is linked to the issuer credit rating prior to the first reset date.
The market has been constructive with the latest Moody’s hybrid capital changes in early 2024 which has resulted in (i) more investor friendly structures (ii) opening up of the US onshore hybrid market and (iii) higher hybrid ratings.
This latest proposed change from S&P will be frowned upon by all stakeholders.
Feel free to reach out to discuss.
[email protected] | +44 7808 164 001
Investment Banker | Strategic Thinking | Team Leadership | Stakeholder Management | Prudential Regulation | Advisory | Capital Structuring | Liability Management | Debt Restructuring | Developing Talent
5 个月I have posted an update on this topic here: https://www.dhirubhai.net/posts/veenay-chheda-5002883a_hybrids-s-moody-activity-7244665552269447171-iD1y?utm_source=share&utm_medium=member_desktop
Debt Capital Markets - Bonds Origination
8 个月Thanks Veenay!