Wealth manager Challenger has cancelled plans to launch new a hybrid security issue, which it was to have used to redeem its current issue of Challenger Capital Notes. It has pushed out repurchase of the hybrids by up to two years.The A$345 million of notes have a call date of 25 May this year and a mandatory conversion date of 25 May 2022.Challenger has received approval from the Australian Prudential Regulation Authority to repurchase the notes on any quarterly distribution payment date up to the mandatory conversion date.A spokesperson for Challenger said it was yet to be determined whether the notes would be redeemed all in one go or in a series of transactions. In the meantime, note holders will continue to receive quarterly distribution payments. The notes will continue to be traded on the ASX, where they are currently selling for around $87 - 13 per cent below their face value.In a letter to note holders, Challenger said: "While there is no guarantee that on a future distribution payment data APRA will grant its approval for Challenger to repurchase the notes, Challenger will endeavour to repurchase them when market conditions allow."Challenger said it remains "strongly capitalised". Its life company has a capital ratio 1.55 times the prescribed capital amount. Challenger Ltd has cash of $400 million drawn under a group banking facility and it can inject $250 million of this into Challenger Life as common equity tier 1 capital.Earlier this month Macquarie Bank and NAB both withdrew hybrid issues, citing market volatility and its likely impact on the price of the notes once they listed.Macquarie withdrew its $500 million offer of Macquarie Capital Notes 2, which it had launched on February 11, saying it made the decision "in light of significantly changed market conditions in recent weeks."NAB withdrew a $1.9 billion offer of NAB Capital Notes 4, which it had launched on February 25.Both banks refunded all the money raised. They also repaid investors in old capital note issued that had reached their call dates.Most of the capital notes listed on the ASX are now trading below their $100 face value - some of them well below.