Commonwealth revives Colonial hybrid

Commonwealth Bank's treasury managers revived a controversial funding structure to sell $700 million in hybrid capital. CBA is securitising part of the Colonial fee flow. The securities are preference shares and notionally perpetual, though the bank may buy back the securities after five years. CBA has two investors taking $350 million each of the Colonial hybrid, one of whom is the Australian branch of Deutsche Bank and the other an unidentified offshore investor. At least one, probably Deutsche, plans to sell down its investment and will most likely be repackaged in a structured security marketed to retail investors.