Corporate Hybrid Bonds : Solvay Case Study

Details

Supervisors

Grégoire, Philippe

Faculty

Louvain School of Management

Degree label

Master [120] en Ingénieur de gestion

Abstract

This master thesis presents corporate hybrid bonds. This little-known type of bond borrows features from equities, as well as from classic corporate bonds. After a general presentation of the corporate hybrid bonds’ main features and markets, this paper develops the mains characteristics of the hybrid bonds and their main advantages and disadvantages for issuers and for investors. All these theoretical elements are developed in the case study concerning Solvay’s issuance of 2015. Solvay indeed issued €1bn hybrid bonds to finance the acquisition of Cytec. The main features of these bonds are presented as well as the rationale for the issuance of this type of corporate bond. Finally, impacts on the WACC, Yield Curves and the Capital Structure are studied