Bank capital: Cocos could be tough nuts to crack

At a recent credit conference in London panellists in a session on bank capital asked the audience whether contingent convertible bonds (cocos) should be included in credit market indices. The session was held in a large room, which was packed with attendees, but not a single hand went up. It seems that proponents of these instruments still have a long way to go in convincing the market of their viability.

Ever since Lloyds and Rabobank issued the only two contingent convertible deals to take place so far (in late 2009 and earlier this year) activity in the market has been confined to a great deal of talk and not much else.