35 years: Debt capital markets
In this video Tim covers hybrid securities and explains why issuers use them.
In this video Tim covers hybrid securities and explains why issuers use them.
5 mins 20 secs
Corporate hybrids are subordinated capital that shares features with both debt and equity. Corporate hybrids resemble debt in that it offers high yields paid regularly, and a call option. They resemble equity in that they have no maturity date, or at least a very long maturity date, and have no obligation to pay interest.
Key learning objectives:
Explain how corporate hybrids resemble both debt and equity
Explain the benefits issuers and investors gain from corporate hybrids
Describe the risks investors face when purchasing corporate hybrids
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