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comment by mk
mk  ·  3211 days ago  ·  link  ·    ·  parent  ·  post: Time for coco bonds before bed?

That's what I am actively trying to form an opinion on. It does look like China issued a lot of them, and as much as their bond market skyrocketed in the last year, it makes me wonder what fraction are CoCos.

The thing I am wondering is this: If bond market liquidity is really not so good, and if a bunch of folk hold CoCo bonds, which could turn into equity of a troubled company, which then dilutes the equity as they convert, couldn't that contribute to a panic?





b_b  ·  3211 days ago  ·  link  ·  

I almost choked on this line:

    The cost of protecting the company’s subordinated debt from default for five years using credit-default swaps has more than doubled since the end of 2015, rising to 438 basis points, a four-year high, from 187.