Macquarie Bank provided the highlight of the week, raising $1.1 billion for five years in the domestic market. The government guaranteed bonds were priced at a spread of 100 basis points over swap, which is a substantial improvement on the 145 bps over bank bills that Macquarie paid on a $500 million private placement of October 2013 bonds, just before Christmas.But in a move that should be a test for the market, Westpac announced on Friday a $500 million, tier one, hybrid security offer, Westpac Stapled Preferred Securities II. The Westpac hybrids have a mandatory conversion into Westpac shares after five years. The higher risk profile of hybrid securities has been brought home to investors during the current crisis, as the relatively high yield and/or wide credit spreads that once looked attractive became thin and the capital value of the securities was quickly eroded as investors tried to exit. Institutional investors have steered clear of this market for some time now, arguing that the credit spreads on offer were too thin and aimed purely at retail investors. Bendigo and Adelaide Bank launched a $75 million convertible preference share offer in late October and pulled it a week later due to a lack of investor demand.The Westpac SPS II securities will offer a floating rate coupon with a credit spread of 370 bps to 400 bps over bank bills. Whether this will be enough to attract sufficient investor interest remains to be seen. With the major banks currently paying 140 bps (including the government guarantee fee) for senior debt in the wholesale market, a further 230 bps - 260 bps to compensate for the additional credit and market risks associated with hybrid securities doesn't seem much in the current environment. Investec Australia also raised $200 million in the domestic market through an issue of five-year, government guaranteed bonds, priced at 130 bps over swap.