When hybrids go bad

Investors bought $285 million of PaperlinX hybrids in 2007, attracted by regular distributions and the prospect of a step-up. Within two years it all went horribly wrong.

PORTFOLIO POINT: PaperlinX hybrid owners are squaring off against shareholders in a striking example of how badly an investment in a hybrid security can go wrong.

Not all is rosy in the land of fixed interest, and the furore being made by PaperlinX hybrid owners is bringing that truth home to investors newly enamoured of the sector.

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