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Daily Archives: 21st January 2019

21st January 2019

CoCo pops up | Bank Capital Insights

CoCo index is up 3% YTD.. and it is just 20 days in the new year

So, AT1 bonds have generically rallied 3 points or so but some bonds are up 4-5 points in a very short period and given the cash prices (low to mid 80s) it translates to a 5% return.   All this in the first 3 weeks of this year and almost half the returns (10%) I had penciled in this for the entire year.

Why did CoCos pop? In a nutshell the performance was driven by re-assessment of rates…..

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