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Contagion: Chain Reactions and the CoCo Powder Keg

Many Happy Returns

CHAPTER

What Is a Cocoa Bond?

After 2008, people didn't want bailouts anymore. Regulators wanted to create an asset class which rewards investors with a fairly high income but at the same time shore up its balance sheet. And that gave birth to the cocoa. So is it a bond specific to banks that's not as secure as a normal bond? It's a bond, which is it's a spicy bond. Another name for them is an 81 alternative tier one. If your equity shrinks to zero, you're dead, you're bankrupt. You explained it very well for someone who's not a conspiracy theorist.

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