The enthusiasm of local and overwhelmingly retail investors for hybrid capital securities from banks that count as tier-one capital and are compliant with Basel III may be well and truly be misplaced if the reaction of international investors to Macquarie Bank's exchangeable capital securities is anything to go by.As reported on Friday, Macquarie advised the ASX that it was only able to find buyers for US$250 million of the securities out of an issue size of US$500 million. Moreover, marketed with a coupon that would pay 600 to 700 basis points over swap, the securities were priced with a spread of nearly 900 bps over the US five-year swap rate.The Macquarie securities have all the features of tier-one capital that more jaded observers (such as the publisher of The DCM Review) have recently come to know and loathe. The 10.25 per cent semi-annual, non-cumulative coupon will be paid at the sole discretion of the bank, but if the coupon is not paid Macquarie Group will not be able to pay dividends or return capital until the next coupon payment is made.The securities have a 45-year life but can be exchanged for Macquarie shares from June 2017, subject to the usual tests relating to the share price being met. There is, of course, the mandatory conversion trigger that will come into play should Macquarie's tier capital ratio fall below 5.125 per cent or the Australian Prudential Regulation Authority form the view that the bank is about to become non-viable.If the securities are not exchanged for equity in June 2017, the coupon to be paid will reset on that date and every fifth anniversary thereafter.Any investor who bought ANZ's CPS3 offer at a spread of 310 bps over the bank bill rate, or Westpac's CPS or Colonial Group's subordinated notes - both paying 325 bps over the bank bill rate - should be feeling well and truly ripped-off.