Investors who bought record amounts of hybrid notes from European companies seeking to protect credit ratings as they increased debt are being rewarded with gains outstripping both junk and investment-grade bonds.
About 75 percent of the 29 billion euros ($39 billion) of hybrid securities sold this year are trading above their issue price, according to data compiled by Bloomberg, beating the 67 percent of equivalent junk debt and 39 percent of high-grade new issues. Storebrand ASA’s notes due April 2043 lead increases with a 7.8 percent jump, followed by French utilities GDF Suez and Electricite de France SA with more than 5 percent gains.
