Hybrid supply fades, but will stay elevated
At a Glance
Per the full note from ING's credit desk, corporate hybrid supply is set to fade from record highs but stay elevated, with a €35bn forecast for 2027 that sits well below recent peaks yet remains structurally supported. The argument rests on a refined refinancing calculation: first-call volumes drop to €23bn, but the unrefinanced 1H27 calls cut true 2027 needs to roughly €19bn, before an estimated €6bn of early 2028 refinancing lifts the total to €25bn—with another €10bn layered on from rising utility capex, rating-defence, M&A, and the popular new Moody's 30NC structure. The 30NC format alone accounted for €15bn, or 32% of the €46bn market in 2026, a detail that signals structural, not cyclical, demand. Because this is a credit-supply note with no tracked currency pair, our internal coverage bundle is empty—no consensus target, no firm spread, and no high-impact calendar events in the next 30 days. The desk's call is a slow-fade thesis: supply stays abundant enough to keep spread pressure on hybrids, but the peak is behind us.
Key Takeaways
- 01ING forecasts €35bn of corporate hybrid supply in 2027, below recent peaks but still elevated.
- 02Headline first-call volume of €23bn masks true refinancing need of about €19bn for 2027.
- 03Early refinancing of 1H28 calls adds roughly €6bn, lifting the total refinancing need to €25bn.
- 04Rising utility capex, rating-defence, M&A, and the Moody's 30NC format add a further €10bn.
- 05The 30NC structure drove €15bn of issuance in 2026—32% of the €46bn market—on IFRS debt accounting.
Full Analysis
What the desk is arguing
ING's credit strategy team frames the 2027 corporate hybrid market as a fade from record highs rather than a collapse, forecasting €35bn of supply that remains comfortably elevated by historical standards. The headline first-call figure of €23bn understates true refinancing need, the desk argues, because some 1H27 calls have yet to be refinanced, pulling the effective 2027 requirement down to about €19bn.
That base is then rebuilt: roughly half of the €19bn in 2028 first calls (€12bn in 1H28) is expected to be refinanced early, adding €6bn to 2027, for a €25bn total refinancing need. The remaining €10bn of the forecast comes from four named drivers—rising utility capex, rating-defence considerations, a still-active M&A backdrop, and the new Moody's 30NC structure.
The counterfactual the desk is implicitly rejecting is a sharper supply cliff. If early refinancing of 2028 calls did not materialise and the 30NC format lost its accounting appeal, the 2027 number would sit closer to the €19-23bn first-call base—materially tighter for hybrid spreads than the €35bn forecast implies.
How other firms see it
The note's structural point is the 30NC Moody's format: because it prices just one notch below the Basic Credit Assessment rather than the usual two, it triggers IFRS debt rather than equity accounting, and that has driven €15bn of issuance, or 32% of the €46bn 2026 market. That accounting quirk is the swing factor between a €35bn year and a sub-€25bn one.
For the macro read-across, watch euro-area investment-grade credit spreads and the utility-sector capex cycle, both of which feed directly into hybrid supply and therefore into the EUR/USD carry picture via broader risk appetite. The European Central Bank's policy path and the euro-area rate curve also matter: lower rates lift refinancing economics and support the early-refinancing assumption baked into the €6bn add-back.
Market Implications
Watch euro investment-grade hybrid spreads and the utility-sector capex pipeline for confirmation of the €10bn structural add-on—if 30NC issuance stalls, the €35bn forecast is at risk. The early-refinancing assumption (€6bn from 2028 calls pulled into 2027) is the most fragile input, so track 1H28 call announcements through late 2027 for signs the desk's €25bn refinancing base is fading.
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Articles Hybrid supply fades, but will stay elevated Published 10:11 Credit Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Corporate hybrid supply should remain reasonably elevated in 2027, although below recent peaks. We forecast €35bn in corpo
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