In its pricing framework, Fitch Solutions has embedded stress tests into the methodology in order to account for the inherent systemic nature of the CoCo bond
A CoCo bond
is a convertible bond in which the price of the underlying stock must reach a certain level before any conversion is allowed.
Global Banking News-September 4, 2014--HSBC to launch inaugural CoCo bond
While detailing its living will to the US Federal Reserve, Credit Suisse said it had a mixture of coco bonds
and loss-absorbing bonds known as TLAC.
are bonds that can be converted into capital in case of financial stress being faced by the company.
may be converted into equity when certain conditions trigger that reaction, and it is likely to be approved by the Basel Committee to help meet tougher capital rules.
Global Banking News-March 25, 2014--HSBC intends to sell CoCo Bonds
Barclays Plc (LSE: BARC) is to launch new Yankee CoCo bonds
despite resistance to the move.
Global Banking News-August 28, 2014--Santander and UniCredit to sell CoCo bonds
Escapes gov't support; 240 mln rights to strategic investors * The Bank of Cyprus raised 594 mln euros in fresh funds from the exercise of a rights issue and the conversion of its Coco bonds
, escaping the need for any government support.
The issue of the CoCo bonds
and their conversion to bank shares would mean that the Cyprus GDP would be burdened with an additional 8%, while the present-day share prices mean the securities would, in effect, undergo a 70% haircut.
Global Banking News-September 2, 2014--Santander to issue CoCo bonds