Hybrid Bond Rush Has Buyers Grappling With Record Low Spread

A flurry of hybrid bond sales at the start of the year in Europe is masking investor nerves over a record low premium for this kind of risky debt.

More than €9.5 billion ($11.4 billion) of such notes have been sold so far this year, the most since 2013, data compiled by Bloomberg show. A relentless rally across credit has driven down their spread over senior bonds to 62 basis points, less than half the past decade’s average, according to ICE BofA index data.