The Suncorp Group's latest hybrid, the CPS3, Additional Tier 1 capital notes, began trading on the ASX on a deferred settlement basis on Friday. The final size of the issue came in at A$400 million, after $360 million of notes were placed in the bookbuild.The CPS3 notes will pay a coupon of 340 basis points over the 90-day bank bill rate, adjusted for franking credits.Earlier in the week, Suncorp announced a buyback offer for its perpetual floating rate capital notes. Suncorp issued $2 billion of the perpetual income securities in 1998.At the time, the notes qualified as tier two capital and paid a grand coupon of 75 bps over the 90 day bank bill rate. The notes are not Basel III compliant and therefore will be phased out as tier two capital.But by today's standard paying just 75 bps over bank bills for perpetual debt is ridiculously cheap.Nevertheless, Suncorp has been progressively buying back the notes with only $170 million currently outstanding. Suncorp is offering to buy the notes at $80 apiece. The notes closed at $73.00 the day before.The offer opened last Monday and will close on June 6.