News media has unbelievable reach, and is an important source of information and education for anybody who wants to better understand their finances.
Sometimes though you need to remember that articles are written by journalists. Journalists are well trained in sourcing a story and communicating it to a wide audience, but can sometimes miss the nuances that come with daily exposure to a single field.
“…also has $145.2 million of hybrid securities listed on the ASX, which in practical terms have the characteristics of debt. The hybrids have a face value of $100 each, and are currently trading on the ASX at about $57.“
The underlines in the above quote are mine, the quote itself from a recent article in a well-known daily newspaper.
I’m here to tell you in advance: if a security faces a 43% capital loss ($100 issue price down to $57 market value) it in fact has almost none of the characteristics of debt.
Unless the loan was to an unreliable friend or family member where you never really expected to get your money back.
Unfortunately my readership is somewhat smaller than the newspaper!