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:
“The new supplants the old. Yet men’s minds are stuffed with outworn bunk. Educating the young in the latest findings of authorities and scholars in the social sciences is important. It is equally important to devise ways and means for aiding the middle-aged and old to reexamine hang-over unscientific doctrines and ideas in the light of recent discovery and research.”
—Mary Barnett Gilson (1877–?)
“A style does not go out of style as long as it adapts itself to its period. When there is an incompatibility between the style and a certain state of mind, it is never the style that triumphs.”
—Coco Chanel (1883–1971)