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
 

Pay bosses in debt – not just equity – to deter future crisis - CITY A.M.

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CITY A.M.

Pay bosses in debt – not just equity – to deter future crisis
CITY A.M.
The November 2011 Liikanen Commission recommended bonuses be partly based on “bail-inable” debt. Indeed, UBS and Credit Suisse have started to pay bonuses in the form of contingent convertible (CoCo) bonds. These are positive moves to deter ...

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Stress tests: EU banks start tarting up | The Corner

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Once confirmed that point, it is expected a flood of contingent convertible bonds coming from German banks. Deutsche Bank would be the first to take action. Other brands such as Commerzbank, NordLB or Aareal Bank would ...
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Hunt for Exotic Yields Is Dangerous - Bloomberg View

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Hunt for Exotic Yields Is Dangerous
Bloomberg View
Europe is seeing a boom in so-called CoCo, or contingent convertible, bonds issued by banks to shore up capital. Investors in these securities are wiped out or forced to convert the bonds to stock, if the issuer's capital falls under a certain ...

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Green Packet files appeal - The Sun Daily

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Green Packet files appeal
The Sun Daily
PETALING JAYA: Green Packet Bhd on Tuesday filed an appeal to the court order for the group to pay RM60 million to Intel Capital Corporation which invested in the telco company's convertible bonds in 2008. "A notice of appeal was filed by ... will be ...

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