We consider the proposed hybrid capital securities to have "intermediate" equity content until their first call dates, which are not expected to be before 2018, because they meet our hybrid capital criteria in terms of their subordination, permanence, and optional deferability during this period.
MAF Holding can also redeem them for cash as of the first call date, which is not expected to be before 2018, and on defined dates thereafter.
The interest to be paid on the proposed capital securities will increase by 25 basis points (bps) in 2023, and a further 75bps 20 years after the first call date.
Consequently, in accordance with our criteria, we will no longer recognize the instruments as having "intermediate" equity content after the first call date, because the remaining period until its call date would, by then, be less than 20 years.
Second, we look at the distribution of call dates, which play a pivotal role in the asymmetric information and underinvestment models.
Second, the distribution of first call dates exhibits a degree of uniformity that seems inconsistent with the notion that call dates are set close to the date when new information will be revealed, as the asymmetric information and underinvestment theories state.
Our second test focuses on the distribution of first call dates among the callable bonds in the sample.
The theories can be tested indirectly, however, by examining the [TABULAR DATA FOR TABLE 5 OMITTED] variation in call dates.
