More companies are paying up when they sell debt to protect their credit ratings and preserve their flexibility down the road. 

Hybrid bonds are a type of debt issued by investment-grade companies, primarily energy and utility companies, that include a few defining features, such as an option to defer coupon payments for several years. Such bonds carry a higher coupon, or interest payment, than traditional bond issuances because they are subordinated, meaning they rank below senior debt in the event of a default. The higher interest rate makes the debt more expensive to issue—and more attractive to some investors.