Latest Style of Hybrids
Most of the hybrid securities issued recently are very bond-like. Although each has individual characteristics, typically:
- they have a set dividend rate for a 5 year period ('reset' period)
- are issued at $100
- the holder has the ability to take the new 'reset' terms, redeem the face value or convert
- the holder can convert into the shares at a discount to the current ordinary share price e.g. 5%
- the conversion ratio is into a dollar amount of shares. e.g. $100 worth of the underlying equity Note: This 'variable' conversion ratio means the price of these hybrids does not react to the movement in the share price, and they therefore behave in a similar way to fixed interest securities (this lack of co-relation with the underlying shares is sometime referred to as a zero delta).
Read more about this topic: Hybrid Security
Famous quotes containing the words latest and/or style:
“Behind every individual closes organization; before him opens liberty,—the Better, the Best. The first and worse races are dead. The second and imperfect races are dying out, or remain for the maturing of the higher. In the latest race, in man, every generosity, every new perception, the love and praise he extorts from his fellows, are certificates of advance out of fate into freedom.”
—Ralph Waldo Emerson (1803–1882)
“It is not in our drawing-rooms that we should look to judge of the intrinsic worth of any style of dress. The street-car is a truer crucible of its inherent value.”
—Elizabeth Stuart Phelps (1844–1911)