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
 

Investors Are Panting For A Risky New Form Of Bonds Issued By Banks - Business Insider

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Business Insider

Investors Are Panting For A Risky New Form Of Bonds Issued By Banks
Business Insider
It took three separate bail-outs to get KBC, a Belgian bank, through the financial crisis. So one might expect bonds that automatically get wiped out if the bank runs into trouble again to reward investors handsomely. Not so: KBC's "contingent ...

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Herbalife Field Report: Nutrition Clubs - Seeking Alpha (registration)

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Herbalife Field Report: Nutrition Clubs
Seeking Alpha (registration)
The bond market figured it out first, and it is quite instructive to see how the convertible bond financing of the stock buyback is faring. It's the canary in the coal mine. Good legal theory says that something is legal as long ... Some people ...

and more »
Read more...
 

Herbalife Field Report: Nutrition Clubs - Seeking Alpha (registration)

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Herbalife Field Report: Nutrition Clubs
Seeking Alpha (registration)
The bond market figured it out first, and it is quite instructive to see how the convertible bond financing of the stock buyback is faring. It's the canary in the coal mine. Good legal theory says that something is legal as long ... Some people ...

Read more...
 

Battle for Club Med Heats Up as Chinese and French Investors Increase Bid - New York Times

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New York Times

Battle for Club Med Heats Up as Chinese and French Investors Increase Bid
New York Times
The new bid, which includes Club Med's convertible bonds, was made through the French and Chinese companies' Gaillon Invest II consortium. It came just hours before a deadline imposed by French market rules for the companies to put up or go ... Fosun ...

and more »
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