Don't bank on hybrids

Alongside the recent collapse in share prices has been a slump in the prices of hybrids, in many cases to below their issue price. I won’t say ‘I told you so’, because I didn’t, but my colleague Richard Livingston certainly has done on many occasions. In not-so-cryptically-titled articles from ‘NAB Sub Notes: At sea and no lifejacket’ to ‘Bank hybrids: What could possibly go wrong?’ and, last week, ‘Commbank PERLS VII Capital Notes: Storm clouds brewing?’, Richard has explained time and again the risks with these complex instruments. But just in case he didn’t get through … The idea behind...

Alongside the recent collapse in share prices has been a slump in the prices of hybrids, in many cases to below their issue price. I won’t say ‘I told you so’, because I didn’t, but my colleague Richard Livingston certainly has done on many occasions.

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