The Next Big Thing In Hybrid Capital.

This article reports that the seemingly endless search for a security that affords issuers the maximum amount of equity credit for the cheapest price took a turn on August 12, 2005 with the debut of a new hybrid instrument, dubbed enhanced capital advantaged preferred securities, or Ecaps. The new instrument is already being hyped as the replacement for trust preferred securities and mandatory convertible preferreds, both massive markets in the U.S. Ecaps allow issuers to receive considerably more equity credit than trust preferreds while maintaining the favorable tax treatment that has made them so wildly popular.