It is usually issued by a bank or financial institution. Capital Securities (CoCos) are hybrid capital securities that absorb losses when the capital of the issuing bank falls below a certain level.
|Securities / Coupon / Maturity|
|HSBC 6 Perpetual||USD|
In addition to the risks of general bonds, the risks of CoCo Bond include (but are not limited to):
- Subordinated bonds: the claim order is after the senior debt, but before common stock
- Loss-absorbing Capacity: bonds have contingent write down or loss absorption feature and the bond may be written-off fully or partially or converted to common stock on the occurrence of a trigger event.