Hybrid Security
Hybrid securities are a broad group of securities that combine the elements of the two broader groups of securities, debt and equity.
Hybrid securities pay a predictable (fixed or floating) rate of return or dividend until a certain date, at which point the holder has a number of options including converting the securities into the underlying share.
Therefore, unlike a share of stock (equity) the holder has a 'known' cash flow, and, unlike a fixed interest security (debt) there is an option to convert to the underlying equity. More common examples include convertible and converting preference shares.
A hybrid security is structured differently and while the price of some securities behave more like fixed interest securities, others behave more like the underlying shares into which they convert.
Read more about Hybrid Security: Examples, Important Terms, Traditional Hybrids, Latest Style of Hybrids, Usage, Basket D Security
Famous quotes containing the word security:
“The horror of class stratification, racism, and prejudice is that some people begin to believe that the security of their families and communities depends on the oppression of others, that for some to have good lives there must be others whose lives are truncated and brutal.”
—Dorothy Allison (b. 1949)