THE riskiest segment of bank debt, called contingent convertible bonds or CoCos, is coming under renewed scrutiny among advisers to wealthy families.
Most heads of multi-family office firms contacted by The Business Times said portfolio exposure to banks’ CoCo issuance is zero. Those whose clients have some exposure cite a range of 2 to 4 per cent. They also have no exposure to Credit Suisse’s CoCo debt.
CoCo bonds, which are Additional Tier-1 (AT1) in banks’ capital structure, were widely recommended by some private banks – even as recently as January and February – due to their higher yields. Private banks have declined comment.
Some strategists, however, cautioned that while the Credit...
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