Pernod Ricard Raises €1.5 Billion Through Hybrid Bonds

Pernod Ricard said Thursday that it has completed a €1.5 billion issuance of euro-denominated hybrid bonds, taking advantage of what the French drinks group described as favorable market conditions and strong demand from investors.

The company, based in Paris, set the terms of the deal on Oct. 22 in a regulatory announcement. The offering was split into two equal tranches of €750 million each. Both securities are perpetual, meaning they have no fixed maturity date, and both are deeply subordinated fixed-reset notes, a form of hybrid financing that is treated by many investors and rating agencies as having both debt and equity characteristics.

One tranche was issued as a perpetual non-call 5.25-year note with a 5.625% coupon. The second tranche was issued as a perpetual non-call 8-year note with a 6.125% coupon. The non-call structure means Pernod Ricard cannot redeem the notes before those initial call dates, except under limited circumstances set out in the bond documentation. The settlement date for both tranches is Oct. 28, 2026.

The company said investor reception allowed it to price the securities at those coupon levels. It also disclosed change-of-control trigger levels of 5.75% for the non-call 5.25-year tranche and 6.25% for the non-call 8-year tranche.

Pernod Ricard said the net proceeds will be used for general corporate purposes, including financing a concurrent tender offer for seven existing bond series. Those bonds mature in September 2027, October 2027, November 2028, April 2030, November 2030, March 2032 and November 2032. By pairing the hybrid issue with an offer to buy back existing debt, the company appears to be using the transaction to manage its liabilities and extend the duration of its financing.

The placement was made with qualified investors, according to the company. Pernod Ricard also said it plans to apply for the new notes to be admitted to trading on Euronext Paris.

The issuance comes as the company holds investment-grade ratings on its senior long-term debt, though both major agencies cited in the announcement maintain negative outlooks. Moody’s rates Pernod Ricard’s senior long-term debt at Baa1 with a negative outlook, while S&P Global Ratings assigns a BBB+ rating, also with a negative outlook. For the newly issued hybrid bonds, Moody’s assigned a Baa3 rating and S&P gave the securities a BBB- rating, reflecting the more junior position of hybrid instruments in a company’s capital structure.

Hybrid bonds are often used by large European companies because they can strengthen balance-sheet flexibility without requiring an immediate equity issuance. They generally rank below senior debt in the event of liquidation, and they usually carry higher coupons to compensate investors for that added risk and their perpetual structure. For issuers, the instruments can be useful when refinancing existing obligations or preserving credit metrics during periods of heavier capital needs.

Pernod Ricard did not announce a public offer in the United States, and the release said the securities have not been and will not be registered under U.S. securities law unless an exemption applies. The company also said the document should not be distributed, directly or indirectly, in Canada or Japan, and noted that distribution may be restricted in other jurisdictions.

The transaction adds fresh funding for one of the world’s largest wine and spirits groups at a time when many large European issuers continue to tap debt markets selectively. For Pernod Ricard, the deal provides a sizable pool of capital while also supporting the separate effort to repurchase portions of its existing bond stack before maturity.

Pernod Ricard owns a broad portfolio of international spirits and champagne brands, including Absolut, Ricard, Ballantine’s, Chivas Regal, Royal Salute, The Glenlivet, Jameson, Martell, Havana Club, Beefeater, Malibu, Mumm and Perrier-Jouët. The company reported consolidated sales of €9.404 billion for fiscal 2026. Its shares trade on Euronext under the ticker RI, and the company is a member of France’s CAC 40 index.