What is Capital Notes?

Perpetual debt securities have no fixed maturity date, making them akin to hybrid securities due to their combination of debt and equity characteristics (similar to shares, they do not mature).

Subordinated debt securities have payment rights that are subordinate to another class or classes of debt, potentially including senior debt holders or ordinary creditors. They are generally considered hybrid securities because, like shares, they rank behind certain debts in a winding-up.

Knock-out debt securities grant the issuer or a third party, such as a prudential regulator like APRA, the right to extinguish them under specific conditions. These securities, typically issued by banks or other prudentially-regulated companies, are structured to be treated like capital or assigned a particular risk weighting by prudential regulators. They are generally viewed as hybrid securities because, in certain circumstances, they do not provide the right to a return of capital, similar to shares.

Source: ASX