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 ?
banks in the wake of Basel III, some interpreted a 2011 speech by then Treasury Secretary Timothy Geithner as a sign that the United States was no longer seriously considering a contingent convertible requirement.
Bethke, "Contingent convertible (CoCo) bonds: a first empirical assessment of selected pricing models," Financial Analysts Journal, vol.
The resulting Tier 1/total asset ratio, a close cousin to the Basel III leverage ratio, of 5.59 percent asset-weighted and 5.81 percent on simple average, is almost twice as high for the top fifty banks as the 3 percent which some who have seen through the bankers' new clothes have reported and characterized as "outrageously low." Such contentious matters are discussed in my just-published book, Contingent Convertibles [CoCos]: A Potent Instrument for Financial Reform (2014).
International Resource News-21 May 2008-Chesapeake Energy Prices Contingent Convertible Senior Notes Offering(C)2008 ENPublishing - http://www.enpublishing.co.uk
Harrah's Operating Company, a subsidiary of Harrah's Entertainment, Inc., announced that the conversion price under its outstanding $375 million Floating Rate Contingent Convertible Senior Notes due 2024 has been adjusted to $65.85 from $66.16, subject to further adjustment as provided for in the governing indenture.
$8.3 billion) and the House has to move closer to the $8.3 billion Senate bill, House conferees may feel comfortable accepting the Senate revenue raiser clipping corporate deductions for contingent convertible debt interest.
Among the instruments that might be categorized in this way are contingent convertible debt and freestanding financial instruments.
So when General Motors floated an innovative $17.6 billion bond issue--including a $4 billion chunk of so-called contingent convertible bonds that will reinforce its pension plan--guys in the green eyeshades asked themselves: Is this a way to slay the pension monster?
As a result, the interest deduction on a contingent convertible is much higher than that of a regular convertible instrument.
The bank is to redeem the contingent convertible bonds on October 23.
Apart from losses for depositors, it also included the sale of the operations of Cypriot banks in Greece, the conversion of contingent convertible bonds into equity and a temporary freeze of deposits.
This allowed the bank to repay outstanding state contingent convertible bonds (CoCos) issued by EspanaDuero and held by the Fund for Orderly Bank Restructuring (FROB) and acquire the stake of the latter in EspanaDuero.