| Just as a change of pace from the 404orum, here's some bad news for those who hope to lower their cost of capital by issuing a hybrid security. As I noted here, key regulators at the National Association of Insurance Commissioners have thrown a spanner in the works, and it looks as if they’re not going to remove it.
According to a Morgan Stanley report I got late yesterday (sorry, no link), a second hybrid, this one by Lincoln National, has been deemed by the insurance industry regulators to be equity rather than debt. And that means insurers won't be able to buy anywhere near as much of this stuff as banks and corporate issuers would like.
See my upcoming article in the June issue of the magazine for more on this topic.
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