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
 

Marathon Patent Group Reports Record 2014 Results - MarketWatch

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Marathon Patent Group Reports Record 2014 Results
MarketWatch
Direct costs of revenue include contingent legal fees, non-contingent legal fees, costs associated with patent enforcement and licensing advisors and in some cases, contingent payments to sellers of patents we have acquired. ..... current portion - 82 ...

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Bank of England warns about financial stability threats - Financial Times

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Bank of England warns about financial stability threats
Financial Times
It will launch a review of banks' capital buffers over the next year, including bonds that can help absorb losses, according to a letter from Mark Carney, BoE governor to George Osborne, chancellor. Contingent convertible, or “coco” bonds, are intended ...

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What is a sophisticated investor, anyway? - GlobalCapital

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What is a sophisticated investor, anyway?
GlobalCapital
As the search for yield drives investors of all quality into higher yielding investments, it's probably a good thing to make sure such deeply subordinated bonds aren't being sold in denominations that could attract true retail investors — if not for ...

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Sometimes regulatory changes create investment opportunities - Times of Malta

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Sometimes regulatory changes create investment opportunities
Times of Malta
Since the coupons of such instruments are rather chunky, the banks have a high incentive to call them or, in the case of LT2 bonds which do not always have this feature, try to persuade investors into tendering them. As such, many of these instruments ...

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