On the Propensity to Issue Contingent Convertible (CoCo) Bonds

34 Pages Posted: 19 Jan 2017 Last revised: 7 Dec 2017

See all articles by José Fajardo

José Fajardo

Getulio Vargas Foundation

Layla Mendes

Getulio Vargas Foundation (FGV)

Date Written: December 6, 2017

Abstract

In this paper we analyze the determinants of CoCo bond issuance. The results suggest that banks who issue CoCos are typically large. Moreover, in the case of BRICS and other emerging economies suggest that banks are also highly leveraged, aiming to meet the Basel III rules and replace debt with equity funding. Also, we find tax incentives evidence for CoCo bond emision in UK. Finally, we study the subsample of Global systemically important banks nding similar results.

Keywords: Continget Convertible, Debt, Financial Distress, Bail-In

JEL Classification: G21, G28, G01

Suggested Citation

Fajardo, José and Mendes, Layla, On the Propensity to Issue Contingent Convertible (CoCo) Bonds (December 6, 2017). Available at SSRN: https://ssrn.com/abstract=2900496 or http://dx.doi.org/10.2139/ssrn.2900496

José Fajardo (Contact Author)

Getulio Vargas Foundation ( email )

Brazil
55213799 5781 (Phone)

HOME PAGE: http://www.josefajardo.com

Layla Mendes

Getulio Vargas Foundation (FGV) ( email )

R. Dr. Neto de Araujo 320 cj 1307
Rio de Janeiro, Rio de Janeiro 22250-900
Brazil

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