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At a glance: Deal type: Self-led Lehman Brothers ECAPs – 60-year non-call five-year step-up (FRN 78 basis points over three-month Libor) Deal size: $300 million Date: August 2005 |
Lehman Brothers’ Enhanced Capital Advantaged Securities (ECAPs) was the first US deal to bridge the gap between traditional trust preferreds and perpetual preferred issues. The gap had been created by the fact that the rating agencies allowed certain hybrid securities to benefit from equity treatment. Trust preferreds are dated tier 1 instruments that US financial institutions raise at the holding company level but which are classified as debt by rating agencies and other authorities.
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