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On 24 February 2011, the Luxembourg Stock Exchange will admit to trading the first contingent convertible bond issued by Credit Suisse Group. Known as CoCo bonds, such issues are used by banks as a method of being compliant with BASEL III rules in order to meet capital requirements. CoCo bonds are convertible into shares when a banks regulatory capital falls below a certain limit. This issue is the third CoCo bond to be created but is the first to target new money, the first two, from Lloyds and Rabobank, being conversions of existing instruments. The Credit Suisse issue (ISIN: XS0595225318), more fully USD 2 billion Tier 2 Buffer Capital Notes, which will pay an annual coupon of 7.875% and with a thirty year maturity, is viewed as a benchmark for other issuers. The...
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