[CFM37620] Loan relationships: 'hybrid' securities: what is a 'hybrid security'?
What is a ‘hybrid’ security?
It should be noted that the word ‘hybrid’ is used in this section of the Corporate Finance Manual, as it often is in commercial parlance, as a shorthand way of describing convertible, exchangeable, asset-linked and similar securities, for which there is a special tax treatment within the loan relationships and derivative contracts rules.
The legislation, at CTA09/S415 and S585 does not refer to hybrid securities, but rather to ‘loan relationships with embedded derivatives’. This chapter also covers situations where a company has a compound financial instrument which contains both liability and equity components.