Bond investors attack 'disastrous' CRD IV rules on CoCos
New capital instruments with contingent triggers will be allowed to make up a slice of Tier I capital under incoming prudential rules, but despite the success of early issues, traditional bond investors remain wary. Is there enough demand to meet an estimated €300 billion in supply? Michael Watt reports
Whenever a new capital market sputters into life, issuers and investors each have a hand on the steering wheel – the former trying to ensure flexibility while constrained by the threat that demand may not materialise, the latter trying to build in protections in the knowledge that too-generous terms will choke off supply. Europe’s market for contingent capital has been going through this process since a 2009 issue by Lloyds Banking Group – the big difference being that regulators also have a
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