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
 

Bailouts, bail-ins and the banks: why we can't afford another financial crisis - The Guardian (blog)

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The Guardian (blog)

Bailouts, bail-ins and the banks: why we can't afford another financial crisis
The Guardian (blog)
They are issuing bail-in securities, known as cocos (contingent, convertible, capital instruments) that convert into equity once a bank's capital falls below a certain level. Cocos act like an insurance policy that can be cashed in at the appropriate ...

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CORRECTED-UPDATE 2-Deutsche Bank's dollar CoCo will boost leverage ratio - Reuters

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CORRECTED-UPDATE 2-Deutsche Bank's dollar CoCo will boost leverage ratio
Reuters
Germany's flagship bank plans to sell between $1 billion and $1.5 billion of the bonds to US investors, part of a plan to sell $5 billion of so-called CoCos or contingent convertible instruments and help improve its leverage ratio to 3.5% by the end of ...
Deutsche's CoCo buyers are not totally irrationalBreakingviews
UPDATE 3 – Deutsche Bank prices US$1.5bn debut yankee market CoCoInternational Financing Review

all 35 news articles »
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Big banks find strong appetite for coco bonds - gulfnews.com

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Big banks find strong appetite for coco bonds
gulfnews.com
Contingent convertible, or coco, bonds, are loss-absorbing debt instruments that can be converted into equity or written off entirely if the issuing bank's capital drops below a pre-agreed threshold. Banks use them to raise capital because they are ...

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When shareholders exacerbate their own banks' crisis - Science Codex

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When shareholders exacerbate their own banks' crisis
Science Codex
Since 2009, this has led European banks to increasingly deploy an instrument that allows them to convert debt into equity in times of need: contingent convertible bonds, also known as CoCo bonds. Banks issue these bonds at fixed interest rates - as is ...

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