Coco gets upside spin in Eu1.3bn Bank of Cyprus offer
Bank of Cyprus plans to issue the first convertible contingent convertible (Cococo) bonds, in an up-to-Eu1.34bn deal targeted predominantly at its existing retail investors — including shareholders, holders of its existing tier one and two capital of various types, and perhaps depositors and the wider public.
The perpetual tier one bonds will convert into equity on the downside — if the bank breaches a low core tier one capital trigger — and on the upside, as with a straight convertible bond.
Its the latest development in the nascent market for Coco bonds and was welcomed by bankers even though its retail-targeted structure, pricing and distribution put it in a different category than the straight Reg S contingent convertibles sold by Credit Suisse and Rabobank earlier this year.
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