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
 

Who's afraid of bank stress tests? - Irish Times

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Who's afraid of bank stress tests?
Irish Times
The yield on Irish 10-year bonds stood at 1.75 percent. That compares with a peak of ... The government can switch its €400 million of contingent convertible notes in the bank into equity, reducing the capital needed, Gaffney said. A share sale is one ...

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Cadence Reports Third Quarter 2014 Financial Results - PR Newswire (press release)

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Cadence Reports Third Quarter 2014 Financial Results
PR Newswire (press release)
"Our consistent performance has enabled us to issue $350 million in investment-grade bonds - a significant milestone for any company our size - that will strengthen our capital structure and fund our continued investment in innovation ...

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Banks 'look firm' ahead of stress tests - Irish Examiner

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Banks 'look firm' ahead of stress tests
Irish Examiner
The yield on Irish 10-year bonds stood at 1.74%. That compares with a peak of 14.2% ... The Government can switch its €400m of contingent convertible notes in the bank into equity, reducing the capital needed, said Mr Gaffney. A share sale is one ...

and more »
Read more...
 

Cadence Reports Third Quarter 2014 Financial Results - MarketWatch

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Cadence Reports Third Quarter 2014 Financial Results
MarketWatch
"Our consistent performance has enabled us to issue $350 million in investment-grade bonds - a significant milestone for any company our size - that will strengthen our capital structure and fund our continued investment in innovation ...

and more »
Read more...
 
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