VW’s smash and grab hybrid stuns corp market

By Stefanie Linhardt
29 Aug 2013

Volkswagen underscored the strength of appetite for corporate credit by taking the bond market by complete surprise on Thursday when it issued the first hybrid deal from a carmaker since the credit crisis. Incredibly, VW got the €2bn two-tranche perpetual away in a single day’s offering — more smash and grab than drive-by. After attracting a €4.5bn torrent of orders the company was even able to increase and tighten the deal and still see it trade up, writes Stefanie Linhardt.

“The fact that you can do a large hybrid in one day without pre-marketing shows how strong the market is,” said a banker close to the deal.

Corporate hybrids have been an important trend in 2013. Names such as EDF and National Grid have issued the instruments this ...

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