S&C Advises BP on Its First Perpetual Hybrid Bond Offering

July 6, 2020

S&C has advised many companies on their response to the COVID-19 pandemic and related financial market uncertainty. For long-time client BP, S&C helped the company strengthen its finances in raising $12 billion on June 22 in a multi-currency, multi-tranche hybrid bond offering across the international markets. The U.S.-registered offering consisted of $5 billion of perpetual hybrid bonds, marking the first time these corporate bonds had been offered in the United States. The balance of the offerings outside of the U.S. consisted of  €4.75 billion and £1.25 billion perpetual bonds.

This was BP's inaugural offering of hybrid bonds, with the debt issued by a wholly-owned finance subsidiary and guaranteed by BP. The offering reinforces BP's commitment to a strong balance sheet and supports BP's investment grade credit ratings. Because these bonds have no maturity date, they are treated as equity from an accounting perspective and as partial equity by credit ratings agencies. This is the largest corporate hybrid bond issuance to date. 

The London-based S&C team was led by Kathryn Campbell and John Horsfield-Bradbury. Tax advice was provided by Eric Wang in New York.