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.
ADDITIONAL tier-1 (AT1) or
contingent convertible bonds (CoCos) were designed in the wake of the 2008 global financial crisis to provide sufficient capital to banks, reduce their risk of failure and ensure that investors rather than taxpayers bear the costs of rescuing a failing lender.
The old adage applies to the banking and finance industry and there is no better instrument to illustrate this adage than the volatile
contingent convertible bond.
Contingent convertible bonds ("CoCo bonds") are hybrid debt instruments.
"DGB Financial Group plans to fund the deal with a mix of
contingent convertible bonds and corporate bonds which will increase the debt at the holding company," Moody's said in a statement.
It could also resume preparing models of how sovereign-debt restructuring could be better supported - whether at the national level, through GDP-linked or
contingent convertible bonds, or at the regional or global level.
The Hellenic Financial Stability FundAaAaAeAeAaAeAeA -- Greece's state-owned bailout fund -- will provide mone aid to the banks by purchasing a mix of new shares and
contingent convertible bonds,AaAaAeAeAaAeAeA which are designed to convert into share in the event a pre trigger is activated, the Greek government (http://www.bloomberg.com/news/articles/2015-11-02/greece-sets-terms-for-aiding-15-9-billion-bank-recapitalization) reportedly AaAaAeAeAaAeAeA said Sun
Different from the few issues of AT1 instruments seen to date in the German market, which have been structured with a write-down mechanism, the instruments issued by Greensill Bank are structured as true
Contingent Convertible Bonds (CoCos) and provide for a mandatory conversion of the instrument in share capital if the bank falls short of certain regulatory minimum capital ratios.
Technically, cocos are that subspecies of
contingent convertible bonds that reference a Basel 111 regulatory capital ratio, principally common equity Tier 1 as a percent of risk-weighted assets, as their trigger.
Meeting the minimum threshold means NBG will not need to resort to issuing costly
contingent convertible bonds (CoCos).
According to the newspaper, the combined caja is likely to receive EUR1.5bn (USD2bn) from Madrid, possibly through the issuance of
contingent convertible bonds.Country: SpainSector: Banking/Financial Services
