Abstract
CoCos are hybrid high-yield instruments that contain an automatically triggered loss-absorption mechanism. These securities convert into equity or experience a write-down when the issuing financial institution is in a life-threatening situation. Hence CoCo bonds automatically improve the solvency of the issuing financial institution in times when it would otherwise have difficulties to raise capital levels. Furthermore conversion CoCos automatically increase the equity basis in times of stress.
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De Spiegeleer, J., Marquet, I., Schoutens, W. (2018). Conclusion. In: The Risk Management of Contingent Convertible (CoCo) Bonds. SpringerBriefs in Finance. Springer, Cham. https://doi.org/10.1007/978-3-030-01824-5_7
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DOI: https://doi.org/10.1007/978-3-030-01824-5_7
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Publisher Name: Springer, Cham
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Online ISBN: 978-3-030-01824-5
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