Hybrid Notes

Hybrid products are financial products that display the traits of both debt and equity.  The most prevalent of these are convertible notes, which are interest bearing notes that convert to equity (shares) at a predetermined point in time.   These notes are often issued by banks and financial institutions to raise Residual Tier 1 Capital in accordance with APRA's capital adequacy standards, and are, in most cases, listed on the Australian Stock Exchange (ASX).

Hybrid products often offer investors superior fixed interest returns relative to other senior, non-structured debt.  Returns are generally higher due to the longer maturity of the instrument and the exposure the holder has to equity price risk upon conversion.  In most cases, however, hybrids are listed on the ASX and therefore provide investors with an additional avenue for liquidity should they wish to redeem their funds prior to conversion or maturity.  Managed well, hybrid products can provide superior returns to investors without the need to take on the additional credit or market risks usually associated with achieving higher returns.

RIM Securities is an active participant in the Australian hybrid securities market.  We can offer customers access to new issues ("primary issues") where banks and financial institutions launch new hybrid stock in the market.  The excellent relationship we have with many banks and financial institutions ensures that we have access to new stock at primary market prices, and at the same time can provide investors with the information they require to make their investment decisions.

For more information on hybrids that can be purchased via RIM Securities please contact any of our sales team in Queensland,Victoria or South Australia.