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HYBRIDS: Orsted Hybrids (Sub: Ba1/BBneg/BBB-): Index move

HYBRIDS
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  • ORSTED hybrids will now leave the IG Aggregate indices (LBEATREU, LEGATRUU, LP06TREU etc) and enter HY (LG30TRUU)
  • The price action following this move depends on the relative selling from IG holders vs HY buyers.
  • Since ORSTED is Non-Corporate (>50% State owned) it is unlikely to go into LP01TREU where it would have a significant weight with 0.57% in total
  • In LG30TRUU, ORSTED Perps would only have 0.087% weight so there may not be much forced buying.
  • All that said, HY funds tend to be more actively managed rather than passive index followers.
  • ORSTED perps will be 4.40%-4.50% yield vs 5.95% for an Index average HY bond.
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  • ORSTED hybrids will now leave the IG Aggregate indices (LBEATREU, LEGATRUU, LP06TREU etc) and enter HY (LG30TRUU)
  • The price action following this move depends on the relative selling from IG holders vs HY buyers.
  • Since ORSTED is Non-Corporate (>50% State owned) it is unlikely to go into LP01TREU where it would have a significant weight with 0.57% in total
  • In LG30TRUU, ORSTED Perps would only have 0.087% weight so there may not be much forced buying.
  • All that said, HY funds tend to be more actively managed rather than passive index followers.
  • ORSTED perps will be 4.40%-4.50% yield vs 5.95% for an Index average HY bond.