kaal:claim:1908473-012

Because contingent capital is a hybrid instrument that pays fixed returns while bearing equity like risk, it may receive low or no ratings, attract a much smaller investor base, and carry higher funding costs.

Source quote, verbatim

As a hybrid security, contingent capital may receive low or no ratings and may have a much smaller investor base and higher costs of funding.

From

Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011), II.B. Limitations and Open Issues, p. 21
https://ssrn.com/abstract=1908473 · source PDF

Cite as

Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473

Holds when

Holds while rating methodologies for hybrid contingent instruments remain unsettled

Classification

failuresupport: arguedfailure: hybrid-rating-penaltyfamily: liquidity-and-market-structure-failuresecurities-law

Verify

The quote above is an exact substring of the source PDF, whose sha256 is 9d578dac663357529edd1f6453fcfe69bdc59ac882408d9edfde5a4c2916befa. Extraction method: pdf-text-layer.
Attestation record: colloquium/attestations/5d9b08c9cce3deee...json
Verify the binding yourself: curl -s https://wulfkaal.github.io/claims/1908473-012.md | sha256sum