Bonds classified as “hybrid” are a mixture of debt and equity. Whereas the hybrid starts out with a fixed interest rate, this interest rate may change over the very long or unlimited tenors of the bonds, in line with the bond conditions. Interest payments can be suspended if no dividends are paid and no shares are bought back. In addition, in the event of an insolvency, the bonds shall be serviced only after all other obligations have been met and only before the shareholders. This resembles the treatment of equity and shares.
At the end of February 2017, we successfully completed the legal transfer of our debt from senior bonds to innogy.
This transaction had been initiated immediately after the IPO of our subsidiary. As a result, innogy has replaced RWE AG as the guarantor for the public senior bonds and as the debtor for the privately placed bonds. Just a small residual amount of the private placement remained with RWE AG.