(CoCos) Contingent convertible bond definition
Contingent convertible bonds, also known as contingent convertibles, CoCo notes or Cocos, are specific type of securities similar to traditional convertible bonds. Unlike traditional convertible bonds, the possibility of converting a CoCo bond to equity is “contingent” on a specified event, that can be different depending on the particular need of an issuer. In case that the issuer of a CoCo bond is a bank, the contingent event might for example be related to the level of Tier 1 capital falling under a given threshold.
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