Contingent Convertibles

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Welcome to CoCoBonds.com
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This site is intended to be an information platform on contingent capital ("CoCo") bonds and related issues. Although we like to call them capital insurance bonds as they fulfill more of an insurance function.

Capital insurance bonds are debt instruments with the special feature that they will convert mandatorily in ordinary shares or similar instruments of the relevant issuer, mostly banks, when one or more triggers are met. Such a trigger could be for example reaching a certain threshold in the required capital ratio of the bank. In this aspect capital insurance bonds resemble more catastrophe bonds (more on cat bonds under www.HedgeFund-Lawyer.com) than convertible bonds. However, as an emerging asset class there are still no clear market standards visible.

The main purpose of capital insurance bonds is to increase a bank's capital in times of distress. Until then, or if the trigger is never met, capital insurance bonds are normal debt instruments which can count to a bank's core cpital (provided the relevant regulator approves it). Nevertheless, there may be times when a bank will not be obliged to pay interest and forgoe the relevant interest payment, in particular when not sufficient distributable profits have been earned.

We recommend you start by viewing our resources:

  • check out our BookShop for literature on the contingent capital solutions
  • click on our Resources link to learn more

Or you can just read our news on relevant issues.

Please visit also our sponsor www.HedgeFund-Lawyer.com and subscribe to our RSS newsfeed.

Last Updated on Monday, 09 November 2009 23:56
 

Jawbone debunks Modigliani-Miller. When's the crash? - FT Alphaville (registration)

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Jawbone debunks Modigliani-Miller. When's the crash?
FT Alphaville (registration)
You could have borrowed to build it, issued common equity, or had fun with a weird hybrid security like a contingent convertible bond, but the real output of the factory would be the same. That should mean that the all-in cost of financing the factory ...

and more »
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Fitch Affirms HSBC and UK and HK Subsidiaries at 'AA-'; Outlook Stable - Reuters

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Fitch Affirms HSBC and UK and HK Subsidiaries at 'AA-'; Outlook Stable
Reuters
Centrally and locally held liquidity portfolios, mostly in the form of government bonds, compare well with peers', and the group's limited wholesale funding is well spread. ..... subordinated debt: affirmed at 'A+' Contingent convertible securities ...

and more »
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Jawbone debunks Modigliani-Miller. When's the crash? - FT Alphaville (registration)

E-mail Print PDF

Jawbone debunks Modigliani-Miller. When's the crash?
FT Alphaville (registration)
You could have borrowed to build it, issued common equity, or had fun with a weird hybrid security like a contingent convertible bond, but the real output of the factory would be the same. That should mean that the all-in cost of financing the factory ...

Read more...
 

New sources of liquidity in a tough market - Lexology (registration)

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New sources of liquidity in a tough market
Lexology (registration)
The market has been seeing the larger number of specialised debt capital markets products in the form of bespoke funding platform products, convertible products, contingent convertible products, high yield products, credit- linked notes, asset-backed ...

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