Hybrid Bonds & Contingent Convertibles (CoCos)
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Hybrid Bonds & Contingent Convertibles (CoCos)

Intuition Publishing
Updated Sep 23, 2020

The issuance of bonds can be an expensive form of debt finance for companies. One problem with traditional bonds is the fixed upside. Hybrid bonds solve this problem by providing lenders with an opportunity to convert to an equity share. We discuss contingent convertibles (Cocos) that involve trigger events which mandate conversion from debt into equity.