Moody’s ‘arbitrary’ criteria weaken purpose of corporate hybrids
The latest pronouncement by Moody’s on how it proposes to treat corporate hybrids has thrown up a barrage of questions for those issuers on the cusp of speculative grade. In a special feature, EuroWeek’s Jon Hay analyses what lies in store.
A methodology announcement by Moody’s last week highlights the paradoxical nature of the burgeoning corporate hybrid capital market — and its potential fragility. The agency’s stance could increase the risk of a company falling off a ratings cliff, just at the moment when it loses investment grade ratings.
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