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
 

CEMEX, S.A.B. de C.V.'s (CX) CEO Fernando Angel González Olivieri on Q3 ... - Seeking Alpha (registration)

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CEMEX, S.A.B. de C.V.'s (CX) CEO Fernando Angel González Olivieri on Q3 ...
Seeking Alpha (registration)
Excluding the 2015 convertibles, for which we have already put in place a contingent convertible in case they do not convert, CEMEX's next significant maturity is the of floating-rate bond, which measures in September of 2015. The September and October ...

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Ireland's Permanent TSB Said to Fail ECB Test on Severe Case - Bloomberg

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Ireland's Permanent TSB Said to Fail ECB Test on Severe Case
Bloomberg
The yield on Bank of Ireland's 1 billion euros of contingent convertible notes, or CoCos, fell as much as 5 basis points to 5.51 percent. The yield on the lender's 250 million euros of lower Tier 2 subordinated bonds fell more than 2 points to 5.75 ...

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Do Europe's banks need surgery? - Financial Times

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Do Europe's banks need surgery?
Financial Times
Europe's banks have raised around €59bn in equity and €31.6bn in loss-absorbing contingent convertible, or coco, bonds since mid 2013. At the same time, eurozone banks have been shedding assets – particularly business loans – to shrink their balance ...

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Pimco΄s banking expert expects 18 lenders to fail ECB stress test - Capital.gr (press release)

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Pimco΄s banking expert expects 18 lenders to fail ECB stress test
Capital.gr (press release)
Bodereau said he had "quite aggressively" bought banks΄ contingent convertible (coco) bonds over the last three weeks as a result of the sell-off, including those of Lloyds Banking Group (LLOY.L) and Credit Agricole (CAGR.PA). Come Monday, Bodereau ...

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