This Wednesday, bankers and lawyers will convene in New York to discuss the mechanics and the uses of a variety of hybrid capital instruments issued by financial firms in the past few months. The breakfast presentation, hosted by Morrison Foerster at the law firm's headquarters, will feature a panel of decision makers, including Barbara Havlicek, chair of Moody's Investors Service's new instruments committee, Scott Sprinzen, chair of the Standard & Poor's new instruments committee, Tom Humphreys, a tax partner at MoFo, and Oliver Ireland, a financial institutions partner at the firm.

The discussion is expected to center around the existing structures that have been employed by Wachovia (CFW, 2/6), U.S. Bancorp (CFW, 12/26), and Washington Mutual. While Wachovia's WITS, UBS's ICONS, and WaMu's REIT-issued bonds all aim to achieve the same goal--tax deductibility, high equity content, and Tier 1 treatment--each firm's approach to achieving these items has varied.

"You've seen three deals and three different structures--that's pretty unusual," said Humphreys, who added so far there haven't enough examples for one structure to emerge as the go-to choice.

One issue likely to get airtime is how investors and issuers view the actual maturities of bonds that use the WITS structure, said Sprinzen. As reported on CFW's Web site Feb. 3, a number of investors bought the bonds on the assumption they would get called at par in five years time because that's how existing securities with similar structures behave. But in fact, Wachovia's intention to call the bonds was never spelled out clearly--something that could generate disappointment for holders farther down the road. "Investors need to understand the extension risk associated with these securities," said Sprinzen.

The panel will be held Wednesday, at 8:30 a.m.