Avoid Macquarie Capital Notes 2

When a banker offers you a hybrid security and a 156-page prospectus, hold on to your wallet. We’ve long preached a ‘no hybrid’ philosophy (see here, here, here, here, here or here). Macquarie Group’s (ASX: MQG) Capital Notes 2 aren’t about to change that.The 5.14% margin the Notes offer above the bank bill rate (currently 2.36%) looks appealing relative to term deposits and is better than the 4.2% margin offered by Westpac’s (ASX: WBC) recent hybrid issue (see Avoid Westpac Capital Notes 3).Nonetheless, it’s still inadequate compensation for the risk, which is nicely summarised in the fine print on Page...

When a banker offers you a hybrid security and a 156-page prospectus, hold on to your wallet. We’ve long preached a ‘no hybrid’ philosophy (see here, here, here, here, here or here). Macquarie Group’s (ASX: MQG) Capital Notes 2 aren’t about to change that.

The 5.14% margin the Notes offer above the bank bill rate (currently 2.36%) looks appealing relative to term deposits and is better than the 4.2% margin offered by Westpac’s (ASX: WBC) recent hybrid issue (see Avoid Westpac Capital Notes 3).

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