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Cocos

All articles tagged with #cocos

Credit Suisse's Loss Triggers Turmoil in Bank Bonds and Forex Markets.

Originally Published 2 years ago — by MarketWatch

The sale of Credit Suisse to UBS has triggered a historic write-down of specialty bonds, including CoCos or additional Tier 1 (AT1) bonds, issued by several European banks. Regulators wrote down the value of Credit Suisse's US-dollar denominated CoCo debt to zero, causing turmoil in the $275 billion market for European convertible bank bonds. Barclays, Deutsche Bank, and HSBC's CoCos were among the hardest hit in New York trade. Investors remain on edge about potential additional fallout in the banking system after several midsize US banks failed, and after a big liquidity injection for Credit Suisse from the Swiss central bank last week failed to calm nerves.

business finance cocos corporate-bonds credit-suisse european-banks finance ubs

Credit Suisse's CoCos Cause Concern for Investors and Insurers Alike

Originally Published 2 years ago — by MarketWatch

Credit Suisse's additional Tier 1 bonds, also known as CoCos, have been written down to zero by Swiss regulators as part of the bank's merger with UBS, spooking investors of the $275bn AT1 market. CoCos are hybrid capital instruments that absorb losses in times of stress and are structured to convert into equity when a bank's capital falls below a certain threshold. They were introduced after the 2008 financial crisis to steer risk away from taxpayers and onto bondholders. The move has wiped out bondholders but not shareholders, even though bondholders typically rank above equity holders in capital structure.

business finance at1-bonds bondholders cocos credit-suisse finance ubs