Cocos and the Struggle to Preserve Going-Concern Value

George von Furstenberg

Chapter 3 in Contingent Convertibles [CoCos]:A Potent Instrument for Financial Reform, 2014, pp 38-48 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Contingent Convertible debt instruments are debt which comes with a contingent obligation to convert to common stock at a loss. This potentially costly obligation, to accept equity for more than it is worth when a designated trigger point for conversion has been reached, relegates cocos to the class of downside convertibles. Holders of Reverse Convertible Securities [RCS] and of catastrophe bonds and makers of Loss Equity Puts [LEP] share this downside exposure with investors in cocos: should bad things happen which they do not control, they lose…

Keywords: Contingent Convertibles; CoCos; Financial Reform; Financial Crisis; Risk Management; Bank Capital; Financial Services; Fixed-Income Securities; Basel III (search for similar items in EconPapers)
Date: 2014
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