Scarcer and in demand

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EUR Corporate hybrid bonds

The hybrid bonds issued so far this year by Engie, EDP, Accor and Iberdrola have all been in strong demand. While this has also been true for senior bond issues, fallen government bond yields and the prospect of the monetary policy remaining loose for a while have made subordinated bonds with higher yields particularly attractive. They should also remain in demand in 2019 for the following reasons: The spread differential between subordinated and senior bonds widened last year. In comparison with senior bonds, hybrids have become more attractive again from an investor’s point of view.