Securities issued as debt, but intended by the issuing corporation to be exchanged for shares by the investors at some time prior to maturity, are known as "hybrid securities".

Question

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Securities described are known as "convertible securities," not hybrid securities. Hybrid securities typically combine features of both debt and equity, such as preferred stock or convertible bonds, but the key distinction is that convertible securities specifically refer to debt that can be converted into equity, not a general class of securities with mixed features.

Securities Issued as Debt, but Intended by the Issuing Corporation