Regulatory uncertainty over CoCos hinders banks and credit investors
Regulators throughout Europe are expected to provide further clarity on the role and structure of CoCo bonds later this year. Until then, investors and banks are earnestly attempting to gauge the effect on the market of any future changes
Contingent convertible bonds, or CoCos, were initially met with some scepticism within the financial market, with questions over whether there was a natural investor base for the product. However, the successful public sale of $2 billion of tier 2 convertible bonds by Credit Suisse in February suggests there is demand, at least where strong institutions are involved.
Issuers hope further clarity on the role of CoCos in the future banking regulatory landscape, due before the end of this year
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