Have to disagree. They&#x27;re still preferred equity instruments with unique trigger provisions. Higher up in the capital structure but not debt; you can&#x27;t credit bid using these instruments in a Chapter 11 scenario and they aren&#x27;t afforded the same protections in bankruptcy court. What attracts investors to debt instruments are the interest payments. You&#x27;d prefer PIK (payment in kind) interest on debt as opposed to cash payments in a low interest rate environment but that doesn&#x27;t translate to pref equity instruments.<p>The unique feature of debt vs equity is that debt has a concave investment profile; you know exactly what you should be getting upon maturity (principal + interest payments). Equity has a convex investment profile; you get the residual value after subtracting face value of debt from the enterprise value.