Showing posts with label contingent convertible bonds. Show all posts
Showing posts with label contingent convertible bonds. Show all posts

Sunday 30 April 2017

Contingent Convertible Bonds ("CoCos")

CoCos are bonds with contingent write-down provisions.

They differ from traditional convertible bonds in two ways:


  • Unlike traditional convertible bonds, which are convertible at the option of the bondholder, CoCos convert automatically upon the occurrence of a pre-specified event.
  • Unlike traditional convertible bonds, in which conversion occurs if the issuer's share price increases (i.e. on the upside), contingent write-down provisions are convertible on the downside.