What is a "CoCo"?
exactly what it says, its a bond that gets converted into company equity once certain levels are breached.
That means you wave goodbye to all bond coupons and principal repayment and you now have (a probably rapidly deprecating due to capital structure stress) piece of equity.
>>1084806
Who actually buys these?
>>1084800
just heard it on bloomberg
>>1084807
That's the right question. According to an analysis of a german paper published in 2014 mostly private banks and small wealthy investors bought coco bonds in 2013. According to pic related something happened though in 2014.
>>1084806
Neutral to bullish cashflow investors would be my bet.
They would be confident in their ability to navigate a restructuring.
Its an interesting concept and if its written up correctly, you virtually guarantee a buy low and discounted scenario with a crash, and fat dividends at the top.
on the human end however, significant rapid power restructuring,
Its kind of a balls deep double down play for the investor and seriously reduces capital risk.
but for a bank to issue something like this is spectacularly foolish.
The whole business model is We are strong and stable so keep your money here.
Serious Brand and Market Share Risk.
Nucking futs
Some people just got a hold of some banks for real cheap.
>>1084800
>What is a "CoCo"?
elaborate debt
WHIP IT THROUGH THE GLASS NIGGA
