# kaal:claim:1908473-012

**Claim.** 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.

**Type.** failure  **Support.** argued

**Holds when.**

- Holds while rating methodologies for hybrid contingent instruments remain unsettled

**Source quote.**

> 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, page 21

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

**Verify.** sha256 of source PDF `9d578dac663357529edd1f6453fcfe69bdc59ac882408d9edfde5a4c2916befa` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Henkel%20-%202011%20-%20Contingent%20Capital%20with%20Sequential%20Triggers.pdf

**Failure mode.** hybrid-rating-penalty  (family: liquidity-and-market-structure-failure)

**Topics.** securities-law

**Keywords.** hybrid-securities, credit-ratings, funding-costs, investor-base

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.