Bendigo and Adelaide Bank has become the latest financial institution to tap into insatiable investor demand for hybrid securities, with the announcement of its CPS2 note issue yesterday. BEN is looking to raise A$200 million - more or less - and follows CBA's PERLS VII issue and Challenger's capital note issue, both of which reached A$2.6 billion and A$360 million respectively, in bookbuilds last week.BEN's CPS2 notes will be listed on the ASX under the ticker BENPE. The issue was expected and will replace the A$100 million of SPS notes (BENPC) issued by Adelaide Bank in 2004.SPS is an acronym for Step-up Preference Share and the SPS will reach their coupon step-up date in October. Hence, BEN's intention is to call the SPS and replace them with the CPS2.The CPS2 notes will pay a discretionary, non-cumulative dividend based on a spread of 320 bps to 330 bps over the 180 day bank bill rate, fully franked. Using BEN's example, this would yield 5.85 per cent per annum pre-tax, compared to its ordinary shares, which are currently yielding 7.6 per cent pre-tax.The CPS 2 are, of course, perpetual, convertible and redeemable, subject to all the standard conditions. Capital event and non-viability triggers are in place.SPS holders will no doubt find the CPS 2 dividend attractive, given the credit spread of offer. The SPS only paid 175 bps over bank bills. However, after waiting ten years to get their money back, SPS holders may take the view that the time has come to deploy their cash elsewhere. The inclusion of capital event and non-viability triggers also changes the risk profile SPS investors would face, if they elect to rollover.The bookbuild for the CPS 2 issue will take place on Monday and the result, along with the credit spread set, will be announced that day. The offer will open on Thursday 11 September and close on Friday 3 October. Deferred settlement trading on the ASX will commence on 13 October.