Posts tagged 'CoCo bonds'

The CoCo cap – a mere €150bn?

The CoCo death spiral is the process by which the expectation of a swathe of bank-issued Contingent Convertible (CoCo) debt converting into equity can exacerbate share price declines.

- We constructed a valuation model calibrated on the CoCos of Lloyds and CS. Read more

Regulators agree extra bank capital protection

Central bankers and regulators have agreed to impose an extra capital charge of 1 per cent to 2.5 per cent of risk-adjusted assets on the largest banks in a bid to protect them from the big losses that could trigger another financial meltdown. The FT reports that the deal agreed a smaller increase in capital than central bankers had wanted, in exchange for stricter rules on what can constitute core tier one reserves. About eight banks will have to hold 9.5 per cent of risk-weighted assets as this capital by 2019, while about 20 will have to hold 8 to 9 per cent. The agreement represents a victory for countries like the US and the UK, however Reuters says the deal will disappoint some banks that hoped to use so-called contingent capital or “cocos” to make up the surcharge.

Moody’s to operate on bank debt uplifts

Proponents of CoCos, bridge banks and bail-ins rejoice!

Moody’s announced Monday that it was analysing the impact of new resolution tools on its rating of subordinated bank debt. As surely you must know, since the financial crisis governments have shifted slowly away from full creditor protection and towards a bit of burdensharingRead more

Snap news

Breaking pre-market news on Monday,

- Credit Suisse issues $6.2bn of CoCo bonds — statementRead more