As flagged a month ago, Macquarie Group is going to replace the A$600 million of Convertible Preference Securities issued in 2008. Macquarie confirmed its intentions with the release of its 2013 results on Friday.That said, Macquarie gave very little away. It only said that the terms of the new hybrid are subject to regulatory approval and that existing holders of CPS will be encouraged to roll over their investment into the new instrument. Macquarie Group shareholders will also be given preference when the new hybrid security offer is opened.Nothing was said about the timing of the issue, but, given a call date of 30 June, for the existing CPS, the offer for the new hybrid securities will probably be launched this week.Unfortunately for investors, the new hybrid securities will not match the fixed coupon of 11.095 per cent per annum paid on the CPS. If Macquarie follows the example of the fully Basel III compliant, tier-one capital issues undertaken by Westpac and National Australia Bank in March, it will offer a floating rate coupon and a credit margin north of 400 basis points.Westpac and NAB both offered margins of 320 bps over the 90-day bank bill rate and yet their hybrid notes have struggled to trade much above face value in the secondary market. To excite investor demand, compensate for the difference in credit quality between Macquarie and the major banks, and the expected absence of franking credits on the coupon, a margin of more than 400 bps seems a given.Of course, this assumes a six-year wait until the first call date is reached, again, mirroring the approach of Westpac and NAB.Still, it should not be assumed that Macquarie will follow the approach of others. Macquarie prides itself on being innovative.A fixed-rate coupon might be the least that should be expected. If Macquarie restricts its points of differentiation to just this, a coupon of eight per cent per annum-plus should be sufficient to generate a solid level of investor interest.