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AmericasJune 4 2006

False dawn for hybrid market

In January, underwriters and issuers were sure innovations in the US FIG hybrid market would prompt a flood of new issues in 2006. Five months on, that flood is a trickle after NAIC classification concerns significantly stalled the infant market, resulting in a stand-off. Kathryn Tully reports.There are a lot of disgruntled bankers, issuers and investors in the US hybrid bond market right now.
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The reason is not that this product could blow up when the credit cycle turns, although there are plenty of investors who consider these deals to be a bull market trade.

It’s not a corporate problem either – only $2bn of US corporate deals have been issued to date.

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