The tier two subordinated debt issue announced by ME Bank on Monday is aimed at institutional investors rather than retail, and is the fourth such issue this year. ANZ Bank is the largest issuer so far, raising A$750 million, priced at 193 basis points over 90-day bank bills.Bendigo and Adelaide Bank was the first to tap this market in January, raising $300 million, priced at 280 bps over bank bills, and IAG followed six weeks later with a $350 million issue, also priced at 280 bps over.The Bendigo and ANZ tier two issues are the most readily comparable with that now being marketed by ME Bank, in terms of having a normal ten-year non-call five maturity structure. The issues carry BBB+ and BBB credit ratings from Standard & Poor's.The IAG transaction is a little different, in that while the notes are callable after five years they can convert to equity (at the holder's option) after eight years and have a final maturity in 2040. Accordingly, the notes are rated A- by Standard & Poor's - three notches below the issuer's senior rating of AA-.The proceeds from IAG's issue were used to part fund the acquisition of Wesfarmers' insurance businesses.  The IAG tier two issue does not provide a pricing benchmark for the ME Bank tier two notes but the ANZ and Bendigo issues do. The ANZ notes are currently priced at 170.5 bps over in the secondary market, and the Bendigo notes are priced at 194.5 bps over, which suggests Bendigo paid a premium to come first.The ME Bank notes are being marketed around 280 bps over, which looks like a fair premium against ANZ and Bendigo but there are differences in this transaction that need to be allowed for.Firstly, this issue is not being rated by S&P, only Moody's Investor Service, at Baa2. If it was rated by S&P, the rating would be BBB-, two notches below the senior rating of BBB+.This makes the issue the lowest rated in the market to date. But more importantly, there are significant structural differences around the conversion mechanism, should the point of non-viability be reached.With the ANZ and Bendigo issues conversion will be into ordinary equity, listed on the ASX. And there is a nominee facility through which the shares can be sold on market, for those investors that cannot accept shares upon conversion.Investors in the ME Bank tier two notes will have their notes converted into unlisted, non-voting ordinary equity. There will be no effective dilution of ME Bank's 30 industry superfund shareholders.Moreover, conversion will be at the book value of the ordinary equity, which is unlikely to be the economic value of the shares at the point of non-viability, but then there is no way of telling because the shares are unlisted. There will be a nominee facility for those institutions that cannot accept shares, and the shares will be sold at the earliest opportunity, in the open market.What open market? Who will want unlisted, non-voting shares? There is only one