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Reasons for Having Cocos Liabilities on the Balance Sheet

In: Contingent Convertibles [CoCos] A Potent Instrument for Financial Reform

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  • George M von Furstenberg

Abstract

The question posed for this Part, “Why Cocos?,” demands an immediate summary of the answers. Within a year after cocos first appeared in the market, this short form for contingent convertible debt securities gained currency and attracted a fair amount of derision. As we have seen in the previous chapters of Part II, however, there are in fact several good reasons for the existence of high-trigger cocos. Adding such ‘recovery’ cocos to the financing mix appears superior to staying only with bailinable bonds and relying simply on more equity, or to counting on voluntary restructuring or Chapter 11 (of the US Bankruptcy Code) reorganization as an expeditious and low-cost way out…

Suggested Citation

  • George M von Furstenberg, 2014. "Reasons for Having Cocos Liabilities on the Balance Sheet," World Scientific Book Chapters, in: Contingent Convertibles [CoCos] A Potent Instrument for Financial Reform, chapter 9, pages 92-100, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814619905_0009
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