{"product_id":"the-pricing-of-already-issued-contingent-convertible-bonds-coco-bonds-von-melanie-prossliner","title":"The Pricing of already issued Contingent Convertible Bonds (CoCo-Bonds)","description":"\u003cp\u003eSeminar paper from the year 2011 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,2, University of Innsbruck (Banking and Finance), course: Risk Management, language: English, abstract: In the year 2007 one of the biggest financial crisis in worlds history has begun. It\u003c\/p\u003e\u003cp\u003eleads to the bankruptcy of huge financial institution followed by the bailout of banks\u003c\/p\u003e\u003cp\u003ethrough the national government and a downturn in worldwide stock markets. The\u003c\/p\u003e\u003cp\u003efinancial crisis has also shown that the capitalizations of numerous financial institutes\u003c\/p\u003e\u003cp\u003ewere not adequate and several components of banks equity could not fulfil their\u003c\/p\u003e\u003cp\u003eplanned function. To save the global financial system from collapsing many banks\u003c\/p\u003e\u003cp\u003ereceived lot of money from the government.\u003c\/p\u003e\u003cp\u003eTo avoid another future crisis and huge bailouts by the national government, some\u003c\/p\u003e\u003cp\u003efinancial experts and leading economists proposed a new financial instrument, called\u003c\/p\u003e\u003cp\u003eContingent Convertibles Bonds (¿CoCo-Bonds¿). They are considered to be an\u003c\/p\u003e\u003cp\u003eopportunity to improve the equity base of banks in times of crisis. CoCo-Bonds are a\u003c\/p\u003e\u003cp\u003especial form of bonds, which convert automatically to equity after a predefined\u003c\/p\u003e\u003cp\u003eincidence.\u003c\/p\u003e\u003cp\u003eThree large banks have already issued these new financial instruments; The Lloyds\u003c\/p\u003e\u003cp\u003eBanking Group (2009), Rabobank (2010) and the Credit Suisse (2011). The aim of\u003c\/p\u003e\u003cp\u003ethis paper is to analyse the structure and the pricing of these already issued CoCo-\u003c\/p\u003e\u003cp\u003eBonds. In the first part the functionality of the CoCo-Bonds will be explained. It will\u003c\/p\u003e\u003cp\u003ealso provide a summary of the specification of the already issued CoCo-Bonds. The\u003c\/p\u003e\u003cp\u003ethird part, which is the main part, is focused on the pricing modalities of these new\u003c\/p\u003e\u003cp\u003efinancial instruments. Two different approaches will be considered. First the credit\u003c\/p\u003e\u003cp\u003ederivatives approach and seconds the equity derivatives approach. In the end of the\u003c\/p\u003e\u003cp\u003epaper both approaches will be applied to the already issued CoCo-Bonds of Lloyds\u003c\/p\u003e\u003cp\u003eand Credit Suisse.\u003c\/p\u003e\u003cdiv class=\"aw-variant-hidden-subtitle-div\" id=\"aw-variant-subtitle-9783656347378\"\u003e\u003ch3\u003e\u003c\/h3\u003e\u003c\/div\u003e","brand":"Libri","offers":[{"title":"Softcover - 9783656347378","offer_id":39446436315229,"sku":"9783656347378","price":15.99,"currency_code":"EUR","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0940\/0622\/files\/5f62a209-6045-4f5d-82c0-0e90b0cc72d4.jpg?v=1777956109","url":"https:\/\/shop.autorenwelt.de\/products\/the-pricing-of-already-issued-contingent-convertible-bonds-coco-bonds-von-melanie-prossliner","provider":"Autorenwelt Shop","version":"1.0","type":"link"}