Late on Tuesday, ANZ announced a A$750 million capital note issue. The announcement comes in the week Westpac had been expected to announce a similarly sized subordinated note issue.The Westpac issue, reportedly offering a coupon of 200 to 220 basis points over bank bills, is now expected to be launched next week.Critically, both issues come after a drought of issuance in the wholesale corporate bond market over the month of June, and a drought of retail issuance since Macquarie Group launched its capital notes issue in May. Moreover, retail bond issuance in any form has fallen away this year after the deluge seen in 2012.By this time in 2012, 10 retail bond issues, totalling more than $6.3 billion, had been launched in the market. This year, the ANZ capital notes bring the number of issues to six, albeit totalling a respectable $5.3 billion.The difference between this year and last is that corporate hybrid issuers like Tabcorp, AGL Energy, Caltex, APA and Crown are absent from the market. This issuance was driven by rating agency criteria that allowed equity credit for the companies concerned, ranging from 50 per cent to 100 per cent.This came to an end in November last year when Standard & Poor's announced it was revising its equity credit criteria. Potential corporate issuers then realised hybrid note issuance that appeared viable under existing rating agency criteria simply became very expensive debt once the criteria changed.Thus, the ANZ capital notes, and even the Westpac subordinated debt issue, may satisfy some pent-up investor demand. The challenge for investors will be establishing the relative value between the two different capital instruments.The structure of the ANZ capital notes follows the now familiar model established for Basel III-compliant additional tier one capital that has been in place since Bendigo and Adelaide Bank launched its convertible preference share offer in September last year.Coupon payments are non-cumulative and paid solely at the discretion of ANZ and the Australian Prudential Regulation Authority, and conversion or write off of the capital notes will take place upon the occurrence of a common equity capital trigger or non-viability trigger event.A common equity capital trigger event will occur if ANZ's common equity ratio falls below 5.125 per cent and a non-viability trigger event will occur if APRA decides the ANZ is on the verge of non-viability.Upon either event, the capital notes will convert into ANZ ordinary shares at a maximum ratio of one-fifth of the price of the ordinary shares at the time the capital notes were issued. If the share price has fallen below one-fifth of its original value then note holders will suffer a capital loss. However, if conversion into ordinary shares is not possible at this time, then note holders will suffer a 100 per cent capital loss as the notes will be written off.If nothing untoward happens, the ANZ has the option of redeeming the capital notes after eight years. Mandatory conversion into ANZ ordinary shares will occur after 10 years, if the redemption option is not