TY  - UNPD
A1  - Goncharenko, Roman
A1  - Ongena, Steven
A1  - Rauf, Asad
T1  - The agency of CoCo: why do banks issue contingent convertible bonds?
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 586
N2  - Why do banks issue contingent convertible debt? To answer this question we study comprehensive data covering all issues by publicly traded banks in Europe of contingent convertible bonds (CoCos) that count as additional tier 1 capital (AT1). We find that banks with lower asset volatility are more likely to issue AT1 CoCos than their riskier counterparts, but that CDS spreads do not react following issue announcements. Our estimates therefore suggest that agency costs play a crucial role in banks' ability to successfully issue CoCos. The agency costs may be higher for CoCos than for equity explaining why we observe riskier or lowly capitalized banks to issue equity rather than CoCos.
T3  - CFS working paper series - 586 
KW  - CoCos
KW  - Contingent Convertible Bonds
KW  - Bank Capital Structure
Y1  - 2017
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/43735
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-437353
UR  - https://ssrn.com/abstract=3067909
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -