Hybrid Preferred Securities

Mar 03, 2007 1 Replies
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Can someone explain in clear terms what hybrid preferred securities are? I understand bonds and preferred stocks - but what exactly are hybrids? If they are backed by bonds who bought and holds the bonds? An example is:



Issuer Name: Citigroup Capital XVII Enhanced Trust Preferred Security (ETRUPS) Issuer Description: This cumulative deferrable hybrid security is an indirect obligation of Citigroup Inc. Citigroup Inc. is a diversified financial services holding company that provides a broad range of financial services to consumers and corporate customers around the world. Type Of Bond/Security: Hybrid Preferred Security



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Investopedia.com gives the following definition for "hybrid security," the category into which hybrid preferreds falls: "A security that combines two or more different financial instruments. Hybrid securities generally combine both debt and equity characteristics. The most common example is a convertible bond that has features of an ordinary bond, but is heavily influenced by the price movements of the stock into which it is convertible."

I found the following also helpful on this subject:

Go to

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. Near the top, click on "Information." Click on "Income Investments," and read.

For info on ETRUPS etc. in particular via quantumonline, you'll have to register (free) and log in. I have not had any problems with spam from this site. I used a phony name for registration. Once registered, click on "Income Lists." Scroll down to the paragraph describing "Trust Preferred Securities." Also, click on the "Trust Preferred Securities" list. This should help with some of your questions below.

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