In a move that is likely to stop the rush of corporate hybrid bond issuance seen in 2012 dead in its tracks, Standard & Poor's released its revised criteria for granting equity credit to such instruments last week.S&P has called an end to the game-playing that went on with company management promising investors that the hybrid notes would be redeemed after five years or so, while at the same time making promises to S&P that the call options wouldn't be exercised.When announcing a review of the criteria last November, S&P highlighted a need to focus much more on the intentions of company management when determining the equity credit that should be given to a hybrid note, rather than the provisions, options and discretion built into the documentation. The revised criteria have been brought into line with that for banks.S&P does not grant "high" equity content to hybrid notes issued by banks because the reputational risk to a bank of not exercising the call option is recognised.  However, to be more specific, S&P will no longer assign "high" equity content to instruments that have: a stated or effective maturity; any step-up coupon feature or equivalent financial incentive to redeem;any type of call option within 10 years of the issue date (with some exceptions). Following the announcement of the changes, S&P wasted no time in placing the BBB+ rating assigned to Santos on CreditWatch with negative implications and stripped Santos' hybrid notes of any equity credit at all. The criteria change means high equity credit can no longer be given, and, as a result, a mandatory coupon deferral trigger embedded in the notes is no longer effective.Santos expressed its displeasure with S&P in a release to the ASX. Santos said it was disappointed by the retrospectivity and inconsistency of the decision, coming after the detailed consultation undertaken in 2010. Santos also noted that its debt facilities do not contain any rating triggers or review provisions.Santos issued €700 million of hybrid notes in September 2010, paying a coupon of 585 basis points over mid-swaps, to yield 8.25 per cent per annum, and added a further €300 million to the issue a month later. The Santos notes have a call date of September 22, 2017 and a final maturity date of September 22, 2070.The notes are now simply very expensive debt. Moreover, it is unlikely that Santos can replace the hybrid notes with equity in the short term, and, thus, a one-notch downgrade from S&P appears probable.With the change in criteria, the equity credit on Tabcorp's hybrid notes was reclassified to "intermediate" from "high". S&P affirmed the BBB rating assigned to the company but revised the outlook to negative.Tabcorp avoided a more adverse rating outcome by assuring S&P that it would compensate for the loss of 50 per cent of the previously 100 per cent equity credit gained from the hybrid notes by underwriting the reinvestment of 50 per cent of its next two dividend payments. While S&P considers this action