09/02/2026

Corporate Hybrid Debt Market: state of the union one year after Moody’s shift

One Year On: Time for a first assessment

By Marc LACRAZ, Vianney HOCQUET and Daniela SAVOIA, Portfolio Managers Hybrid Corporate Debt

Last year, we published a white paper based on the Moody’s methodology change regarding corporate hybrid debt1 and its impact on our market. Although seemingly minor, we suspected that this shift would have major implications for this still relatively young asset class in capital market terms. Indeed, the methodology change has made these instruments more attractive to US issuers, paving the way for an increase in issuance volumes. New issuers were also expected to enter the market, thereby improving diversification. 
Almost exactly one year from that publication, it is time to take a step back to assess the real impact on the market and consider what 2026 may look like.

1. An increasingly attractive market for bond investors

2. No end in sight for this trend, which continues to be structurally driven by energy demand and M&A

3. “Moody's structure” is a new feature that is proving popular in the United States and Europe