Seek Limited this week became the latest company to launch a hybrid security issue aimed at retail investors. The launch of Seek's hybrid comes less than a week after the Tatts Group launched its retail bond, and before Tatts has completed the book build for its issue.The latter point may well prove to be significant. As noted last week, the Tatts Group's bond issue should be welcomed because it is a clean, plain vanilla, senior bond issue. And it is only the third non-financial institution, senior bond issue since the Tabcorp bonds in May 2009.But the problem with the Tatts Group bond is the difficulty of assessing Tatts' credit risk in the absence of any reasonable information. With no credit ratings, wholesale or retail, the Tatts Group presents investors with a classic case of information asymmetry, which makes the pricing of its bonds risky.And it appears this information asymmetry has challenged even institutional investors. On Wednesday, the Tatts Group advised the ASX that the credit spread on the bonds had been set at 310 basis points in the book build, which is the wide end of the indicative range. Moreover, the book build has generated bids for only A$185 million of the bonds and not the A$200 million sought.Another possible explanation for this outcome is that investor appetite for fixed interest is starting to wane, after the rush of issuance seen this year. Either way, this does not bode well for Seek.Seek is planning to raise around A$125 million. The hybrid notes on offer are subordinated to all creditors and only rank ahead of shareholders in any winding up of the company. As with similar hybrid issues seen this year, franked dividends (see below) will only be paid at the sole discretion of Seek and missed payments are non-cumulative. There is only an ordinary share dividend stopper to encourage distributions on the hybrids.Similarly, while the hybrid notes are callable after five years, there is no real compulsion to do so. Sure there is a 200 bps dividend step-up if the notes are not called, but remember this is only a 140 bps after-tax cash outflow for the company.Moreover, with the fixed dividend offering an indicative credit spread range of 500 to 550 bps over the five-year swap rate, a 200 bps step-up is not that significant, especially if the company is cash constrained at the time.Leaving aside the fact that the dividends will be paid on an after-tax basis with franking credits (if available), the size of the dividend should ring alarm bells. This is the highest yielding hybrid to be offered this year.Seek's explanation for this is that it is seeking flexibility and is, therefore, prepared to pay for it (although it may end up paying nothing at all). Certainly, the way the hybrid has been structured, it provides Seek with all the flexibility of equity without Seek having to give away any of the upside that comes with real equity. Seek's shareholders' stock will not be diluted by the