CoCo

Rating agency Moody’s Investors Service expects that use of contingent capital securities, including contingent convertibles (CoCo’s) by insurance and reinsurance companies will increase as they are set to be considered as regulatory-efficient capital.

The German finance ministry has given the countries banks a green light to pursue the issuance of contingent convertible bonds, or CoCo’s, and other contingent capital deals as it clarified the instruments tax treatment.

Reinsurance firm Swiss Re has successfully completed its novel dual-trigger contingent capital security transaction, having sold CHF175m Swiss francs of notes linked to either the occurrence of a major decline in its solvency level or a major natural catastrophe loss.

Financial market sources have told us that reinsurance firm Swiss Re is looking to secure a new source of contingent capital protection for its solvency and balance sheet with the launch and marketing of a new dual-trigger contingent capital securitized bond issuance.

Reinsurer Swiss Re’s contingent capital bond issuance came to market last month and succeeded in securing the Swiss based reinsurer a $750m source of capital protection linked to its solvency from investors. The transaction received a lot of attention in the press as it came to market and was reported to have been oversubscribed as […]

Almost two weeks ago we wrote about the rumoured contingent convertible bond issuance which Swiss Re would be sponsoring as a way to protect its balance sheet against declines in its capitalisation. Contingent capital used in this way can provide broad protection against many risks which could impact a reinsurer like Swiss Re, from large […]

Reinsurer Swiss Re is in the news today regarding the use of contingent capital, after a bank told reporters at Dow Jones that the reinsurer plans to arrange a series of meetings to roadshow a contingent convertible bond issuance. The bank source is said to be one of the institutions arranging the investor meetings, or […]

Contingent capital is an alternative form of capital or financing which can be triggered and made available under certain, specific pre-defined circumstances. It’s becoming a flexible way for companies to arrange a source of financing which is made available at precisely the times they need it. In the case of re/insurers contingent capital can come […]

Ratings agency Moody’s has published an article discussing the announcement from French reinsurer SCOR about the triggering of their catastrophe linked contingent capital facility. Just over a week ago SCOR announced that the facility had successfully been triggered and would pay them €75m due to their rising catastrophe losses.

Contingent capital, which provides a source of capital under certain circumstances and triggers, is becoming a more popular way to provide a predictable source of financing at exactly the times that a company requires it. The other day we wrote about French reinsurer SCOR’s contingent capital facility being triggered due to their increasing Q1 natural […]