Hybrids in the news

Researchers estimate maximum potential of market of CoCos to be around EUR 150 billion


Basel Rules Allow CoCo Bonds as Capital, Prefer Alternatives, Ingves Says

Europeans Lose Out to U.S. With Basel Committee’s Contingent Capital Vote

The decision to make too-big-to-fail banks primarily use retained earnings and ordinary shares to meet heightened capital requirements was a victory for U.S. regulators over their European counterparts.

Basel hits market for CoCos

The size of the potential market for contingent convertible bonds (CoCos) in the UK has shrunk by two thirds following a decision not to allow banks to count the instruments as capital cushions, according to analysis by Bank of America/Merrill Lynch.

Coco Bond Market Dealt Blow By Regulators

Contingent capital bonds, or "cocos," have been phased out of the most recent definition of capital instruments that count as readily-available funds banks are required to hold in case of a crisis, the Basel Committee on Banking Supervision said at its meeting over the weekend.

Basel pops CoCo market hope

Regulators' Decision on Contingent Capital Backs U.S. Stance

Press Release BIS : Capital Surcharge for SIFIs

At its 25 June 2011 meeting, the Group of Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision (BCBS), agreed on a consultative document setting out measures for global systemically important banks (G-SIBs). 

Central bankers agree on bank capital surcharge plan

Global banking regulators have agreed on a proposal to slap an extra capital charge on the world's biggest banks to make them safer by 2019. There is a smaller role for CoCos as initially expected. 

ECM launches a coco fund

European Credit Management (ECM), a specialist fixed income manager, is in the process of setting up a fund that will invest specifically in banks' subordinated debt and contingent capital 

B of I reduces State's maximum stake to 69%

Danish Central Bank Opens Door to CoCos to Help Biggest Lenders

Denmark's central bank is open to letting the Nordic country's biggest lenders resort to contingent convertible bonds to help them meet extra capital requirements designed to prevent insolvency.

Expenses of €150m for latest Bank of Ireland capital raising

Bank of Ireland will incur expenses of €150 million from its latest capital raising exercise, which aims to generate funding of €5.2 billion to allow it to meet new regulatory requirements on its capital ratios.

CoCo market ripe for issuance as regulatory clarity nears

Contingent capital instruments that convert into equity when they hit a pre-set trigger emerged as the favoured security for investors and issuers during a seminar on CoCos held at Deutsche Bank in London on Wednesday. The seminar gathered over 200 participants, including leading fixed income investors and issuers.

Biggest banks may face stiffer capital surcharge

The world's biggest banks face a capital surcharge of up to three percent in a bid to keep taxpayers off the hook next time a lender gets into difficulty, Bundesbank and industry officials said on Friday.

Largest Banks May Face Surcharge Up to 3 Percentage Points, Dombret Says

Bundesbank board member Andreas Dombret expects capital buffers of 2 to 3 percentage points for banks deemed too-big-to-fail because their collapse could endanger the wider financial system and hurt economic growth.

Basel Weighs 3.5-Point Fee to Curb Bank Growth

The Basel Committee on Banking Supervision is considering extra capital requirements of as much as 3.5 percentage points.

SNB vice-chief sees sufficient demand for CoCos

Swiss National Bank Vice-Chairman Thomas Jordan said he was confident there would be enough demand in the market for contingent convertible bonds.

Biggest banks face capital clampdown

Global regulators are poised to set a new tiered regime of additional capital requirements for about 30 of the world’s biggest banks, in the latest effort to ensure the next financial crisis can be contained. Three possible surcharge levels are going to be possible 3% , 2.5% , 2% and 0.5-2%

Capital Surcharge Changes

The Basel Committee on Banking Supervision is considering proposed capital surcharges of as much as 3.5 percentage points that the largest banks may face if they grow any bigger, according to two people familiar with the talks.

A Plan to Help Avoid the Next Crisis: Market-Based Risk Indicators

Article pointing out the need to favor market based triggers and not accounting triggers when designing contingent capital.

Geithner urges global rules on swaps to minimize risk

Geithner said regulators will require the largest US firms to hold an additional surcharge of common equity. He added that regulators “do not need to impose on top of that requirement any of the three other proposed forms of additional capital — convertible, bail-in, contingent capital instruments, or counter-cyclical capital requirements.’’

Will the last Irish bank to leave the market please turn out the lights

Bankers welcome Barclays planned non-dilutive CoCo

Bob Diamond, the Barclays' chief executive who was speaking in front of a Treasury committee said that his bank was "very close to having a coco that would be regulatory compliant." In his testimony, Diamond also said that while the bonds would write-down, there should be an option for them to recover once the bank returned to full health.

State may earn e1.5bn from latest bailout but bank profits to suffer

Bank of Ireland revealed the terms of the so-called 'contingent convertible' debt instruments last week, when it announced plans to raise some €5.2bn in capital by the end of July.

BoI facing €115m fee on capital-raising plan

Yesterday's announcement also gave the first insight into the terms for the Government's €1bn short-term loan to Bank of Ireland through a so-called "contingent convertible" facility.

Bank of Ireland announces details of its planned bond-burning programme: AIB bond case withdrawn

Stefan Edberg : from tennis to CoCos

IFR-Credit Suisse gears up for US CoCos

The US public bond market is being targeted by Credit Suisse for a contingent capital (CoCo) bond issue.

Irish eyes are watering

Bank of Ireland must raise €4.2 billion in capital by the end of July and a further €1 billion in contingent convertible (CoCo) bonds. The offer is similar to the one proposed by Allied Irish to its bondholders.

Strengthening Bank Regulation: OSFI’s Contingent Capital Plan