Morgan Stanley

Rizvan Dhalla

Serkan Savasoglu

Jonathan M Ross

Jeffer M Choudhry

Scott Greenberg

The present invention is directed to a method comprising the step of issuing one or more convertible hybrid securities by an issuer to one or more investors. The issued hybrid securities may have (1) a legally enforceable covenant (e.g., an RCC) and (2) a mandatory deferral which may require the issuer to withhold certain payments upon an occurrence of specified events. The hybrid securities may be convertible by the investor or callable by the issuer. Upon conversion by an investor, the issuer may make a payment to the investor in an amount of preferred stock up to the par value of the hybrid securities and an amount of common stock for the amount paid over the par value of the hybrid securities. The preferred stock may comprise a dividend rate. The dividend rate may be (1-statutory tax rate) times a coupon for the hybrid securities. The issuer may settle with the investor, or all of the investors, upon the issuer calling the hybrid securities.

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New York, NY, United States of America

Rizvan Dhalla