Contingent Convertibles

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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 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.

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Last Updated on Monday, 09 November 2009 23:56

Moody's Investors Service has today assigned a (P)Ba2(hyb) rating to Barclays ... - (press release) (subscription)

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Moody's Investors Service has today assigned a (P)Ba2(hyb) rating to Barclays ... (press release) (subscription)
This perpetual non-cumulative AT1 securities rank pari passu with the most senior class of preference shares and existing mandatory convertible notes of Barclays and senior to ordinary shares. Coupons may be cancelled on a non-cumulative basis at the ...

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What's Next For Greece? (NBG) - Seeking Alpha

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What's Next For Greece? (NBG)
Seeking Alpha
Some banks may therefore need to raise capital, but the amount of capital needed would be manageable and might be done in the form of contingent convertible securities (CoCos), which would avoid diluting existing shareholders. ... Given the market's ...


Form 8-K Great Plains Holdings, For: Jul 28 -

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Form 8-K Great Plains Holdings, For: Jul 28
On July 29, 2015, Great Plains Holdings, Inc. entered into a Securities Purchase Agreement with an accredited investor pursuant to which we issued and sold to that investor 3,000,000 shares of our Series C Convertible Preferred Stock (“Series C ...

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Perion Reports Second Quarter 2015 Results - MarketWatch

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Perion Reports Second Quarter 2015 Results
Non-GAAP costs and expenses in the second quarter of 2015 excluded a gain from the reversal of acquisition related contingent consideration of $6.6 million, as well as $4.2 million impairment of acquired intangible assets, $1.6 million amortization of ...

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