CoCo market lacks buoyancy

Contingent capital was expected to explode into a $100 billion-a-year market. But the bumper issuance has failed to materialise

Monday 22 July 2013 at 17:00

In the heady days before bank capital regulations under Basel III were finalised, market participants were confidently predicting that contingent capital issuance, which became shortened to CoCos, could top $1 trillion within a decade.

That represents a run rate of $100 billion a year, but issuance since then has failed to live up to expectations, even though investors have responded well to deals when they have appeared.