Hybrid securities combine elements of debt and equity and are complex products

Hybrid securities combine elements of debt and equity and are complex products. But at current prices, Multiplex SITES provide a yield of well over 7 per cent with a solid business underlying the securities. They also have potential upside from a redemption at face value, which makes them a good option for income investors. The SITES distribution rate is set at the start of each quarter and represents the three-month bank bill rate determined on the first business day of the relevant distribution period, plus a margin of 3.9 per cent. Distributions are discretionary, although have been paid quarterly since listing on the ASX in January 2005. So far this year, Multiplex SITES have made three distributions of $1.60, $1.63 and $1.65. Its next distribution is for the period between October 1, and December 31. The three-month bank bill rate on October 1 was around 2.7 per cent per annum, so the distribution rate will be about 6.6 per cent. Read more (VIEW LINK)