A $2.5 billion hybrid bond issue from Germany’s Siemens took centre stage in London’s bond markets on a quiet day for gilts.
Hybrid bonds, which blend features of equity and debt, are proving increasingly popular, with General Electric having sold $2 billion of euro and sterling-denominated hybrids earlier this week.
Yesterday it was the turn of Siemens to tap the market, with the engineering group using Deutsche Bank and UBS to sell a £750 million 2066 fixed-to-floating rate bond — which pays a 618 per cent coupon and is callable in 2016 — and a €900 million bond, also due in 2066.
In the absence of fresh economic data either side of the Atlantic, the government bond market traded in a narrow range above Thursday’s close. The December gilt future gained 19p to £110.01 on turnover in 63,000 contracts. In benchmark issues, Treasury 4½ per cent 2011 gained 8p to £98.18, with Treasury 6 per cent 2028 up 39p to £124.55.