Moody's Upgrades Vodafone Hybrid Debt to Baa3

Rating Upgrade Overview

Moody’s Investors Service announced on 19 August 2026 that it has upgraded the rating of four Vodafone Group Plc hybrid debt instruments from Ba1 to Baa3, with the outlook remaining stable.

Instruments Affected

The four hybrids are:

• GBP 500 million issued in 2023, maturing in 2086 and callable in 2031.
• EUR 750 million issued in 2023, maturing in 2084 and callable in 2029.
• EUR 1 billion issued in 2020, maturing in 2080 and callable in 2030.
• EUR 500 million issued in 2018, maturing in 2078 and callable in 2028.

Rating Implications

The Baa3 rating places the hybrids one notch below Vodafone’s Baa2 senior unsecured rating, rather than the two‑notch gap that previously existed. The securities rank junior to all senior debt obligations but senior to all classes of share capital and to USD‑denominated hybrids that were not subject to the amendments. They carry a five‑year limit on coupon deferral.

Structural Features

Moody’s notes that the hybrids continue to receive a 50 % equity credit and a 50 % debt treatment for financial leverage calculations, based on features such as optional coupon deferral with mandatory settlement after five years, a contractual maturity of at least 30 years, and no step‑up in coupon before year 10. The rating now aligns the instruments with two other hybrid securities issued in September 2025, and they are no longer classified as preferred‑equivalent.

Outlook and Financial Expectations

Moody’s stable outlook reflects its expectation that Vodafone’s operating performance will improve after fiscal 2026. The agency projects that Moody’s‑adjusted debt‑to‑EBITDA will decline gradually through fiscal 2028, and that Moody’s‑adjusted retained cash‑flow‑to‑net‑debt will remain strong despite a modest weakening following the cash buyout of VodafoneThree.