Off the beaten track: Macquarie ECS

Key Points Recent bank hybrid issues priced at a lower yield than ordinary shares: No adequate compensation for risk This hybrid trades on a higher yield than ordinaries Not recommending yet, but we are interested Background Financial institutions have been lining up to enter the hot market for convertible hybrid instruments. ANZ, Westpac and IAG have all raided the wallets of retail investors. You are probably aware by now that we are not huge fans of such offers—the returns on offer are nowhere near enough compensation for the risks they entail. With bank shares trading on (grossed up) dividend...

Financial institutions have been lining up to enter the hot market for convertible hybrid instruments. ANZ, Westpac and IAG have all raided the wallets of retail investors.

You are probably aware by now that we are not huge fans of such offers—the returns on offer are nowhere near enough compensation for the risks they entail.

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