Answer 1

In ESMA’s view, CoCo-Bond [CoCo Bonds are highly complex, hybrid capital instruments with loss-absorbency features written into their contractual terms. One key characteristic is that they feature an equity conversion or writing down trigger, set with reference to the issuer’s capital position in relation to regulatory requirements. CoCo Bonds are eligible towards issuers’ Additional Tier 1 (AT1) capital and feature other unusual characteristics for non-equity instruments, in that they are permanent notes with entirely discretionary income payments. This means ‘coupons’ may be cancelled at any time, for any reason, and the notes may never be called. While CoCos can be designed in a range of different ways, all are highly complex instruments presenting inves

…