The Federal Court has ruled that Commonwealth Bank was not entitled to attach franking credits to distributions made to investors in a hybrid security issue, PERLS V.The full bench of the court yesterday upheld an earlier ruling against the bank.PERLS V was an issue of stapled securities issued by CBA through its New Zealand branch in 2009. The two parts of the stapled security were an unsecured subordinated note and a preference share.Investors were offered a quarterly distribution that was expected to be fully franked.The Australian Taxation Office disallowed the franking benefits, claiming that the payment structure involved illegal dividend streaming.