Contingent Convertible


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Contingent Convertible

A convertible bond in which the price of the underlying stock must reach a certain level before conversion is allowed. All convertible bonds have a conversion price, that is, the price one pays in order to exchange the bonds for stocks. Contingent convertible bonds, however, have a second, higher price that the underlying stock must meet before a bondholder is allowed to convert. For example, the conversion price for a convertible bond may be $10 per share, but if the stock price is below $20 per share, the investor may not convert the bond.
References in periodicals archive ?
163(1) did not apply to the contingent convertible debt, even though the debt instrument will be paid in stock on conversion or may be paid on exercise of a put by the holder (at the issuer's option).
The company has offered USD500m of contingent convertible senior notes due 2038.
Under the plan, the four will have to issue new shares to achieve a core tier 1 capital solvency ratio of at least 6% and contingent convertible bonds, or CoCos, to boost the ratio to 9%.
Net proceeds from the offering will be used to repurchase and cancel 6,857,000 shares of contingent convertible preferred stock owned by AIG.
5% Contingent Convertible Senior Notes due 2037 (the "2037 Notes") validly tendered and not validly withdrawn for an aggregate consideration of approximately $600.
A 25 percent limit on investments in convertible bonds will also be removed, although there is a 10 percent cap on contingent convertible bonds.
Under the plan, banks will have to issue new common shares to achieve a core Tier 1 capital solvency ratio of at least 6% and contingent convertible bonds or CoCos to boost the ratio to 9%.
The bank has started collecting orders for the inaugural Swiss franc issue of high-trigger contingent convertible securities (CoCos) and said the minimum size of the deal would be CHF250m (USD275m/EUR207m).
Next week, international regulators are to meet to review whether CoCos, or contingent convertible bonds, may count towards capital requirements for systemically important banks.
Woori Bank stated that it plans to issue contingent convertible, or CoCo, bonds worth $500 million, looking to boost its capital ratio ahead of its next privatization attempt.