Riskier Companies Venture Into Europe’s Red-Hot Hybrid Bonds
- Smaller, riskier companies are able to dip into the market
- Hybrids have outperformed against senior bonds this year
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Hybrid bonds have been the darling of Europe’s bond market, offering a rare combination of quality companies paying higher yields. But now, both of those benefits are being eroded.
Korian SA, an unrated company that runs nursing homes across Europe, was able to sell a 200 million pound ($282 million) bond with a yield of 4.25% last week. To some investors, it’s evidence that riskier companies are able to dive into a part of the market previously reserved for safer borrowers.