Bayer Tastes like chicken

The hybrid debt wagon is rolling faster. Bayer has become the fourth issuer in the past two months to issue deeply subordinated debt. Quasi-equity is in vogue after ratings agencies laid down clear guidelines on its treatment. Issues, like Bayer’s, that carried extremely long maturities, deep subordination and the possibility of coupon deferral would be treated largely as equity. Standard & Poor’s, for example, treats the Bayer hybrid as 75% equity and 25% debt for the purpose of figuring out cr...