Hybrids on track in the US

Bankers predict hybrid capital volumes to intensify this year and reach as much as $65 billion

Hybrid capital, fast becoming the financing solution of choice with European companies, is now making its mark on the US corporate bond markets with more than $6.7 billion of issuance in the US dollar markets so far in 2006, according to Morgan Stanley.

Hybrid bonds combine features of debt and equity, providing cost-effective funding without diluting equity stakes or increasing leverage. Junior to all other classes of debt but still benefiting from the tax break associated with interest-bearing