Moody's Ratings upgraded four Vodafone Group Plc hybrid debt instruments by one notch on Tuesday, reflecting amended terms that align their treatment with other recent issuances.
The upgrades apply to hybrid securities totaling £500 million and €2.25 billion, issued between 2018 and 2023. The GBP 500 million hybrid maturing in 2086 and callable in 2031 was raised from Ba1 to Baa3, as were three euro-denominated hybrids: €750 million (2084 maturity, callable 2029), €1 billion (2080 maturity, callable 2030), and €500 million (2078 maturity, callable 2028).
The upgrades place the hybrid ratings one notch below Vodafone’s senior unsecured debt rating of Baa2, up from two notches below previously. Moody’s cited structural changes, including the removal of preferred-equivalent treatment and alignment with two additional hybrid securities issued in September 2025. The agency also noted a five-year limit on coupon deferral and no step-up in coupon before year 10.
Moody’s assigned a 50% equity credit and 50% debt treatment for financial leverage calculations. The hybrids remain junior to all senior debt obligations but rank senior to share capital and unamended USD-denominated hybrids.
The rating agency maintained a stable outlook, projecting gradual improvement in Vodafone’s operating performance post fiscal 2026. Moody’s-adjusted debt/EBITDA is expected to decline through fiscal 2028, while retained cash flow to net debt is forecast to remain strong despite some weakening following the cash buyout of VodafoneThree.
