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A [[subordinated]] [[debt instrument]] which is not [[Equity security|common equity]], but is sufficiently ''like'' it, in certain moods, that it can be treated as being the same as tier 1 capital (hence its alternative name of “AT1”, or “[[additional tier 1 capital]]”). | A [[subordinated]] [[debt instrument]] which is not [[Equity security|common equity]], but is sufficiently ''like'' it, in certain moods, that it can be treated as being the same as tier 1 capital (hence its alternative name of “AT1”, or “[[additional tier 1 capital]]”). | ||
Cocos have shapeshifting features of being able to turn into common equity if ''la merde frappe le ventilateur''. In fact, that is really what they are for: to create an additional capital cushion for old “[[Lucky]]” the sick dog of the financial system when, finally, it gets what has been coming to it for literally years. | Cocos have shapeshifting features of being able to turn into common equity if ''[[la merde frappe le ventilateur]]''. In fact, that is really what they are for: to create an additional capital cushion for old “[[Lucky]]” the sick dog of the financial system when, finally, it gets what has been coming to it for literally years. | ||
Come in two kinds: one which, if the tier one equity trigger is struck, get mixed in with the other common equity holders (these we call call “'''co-co powder'''”) and the other which, if struck, get cancelled altogether (“'''co-co pops'''”). | Come in two kinds: one which, if the tier one equity trigger is struck, get mixed in with the other common equity holders (these we call call “'''co-co powder'''”) and the other which, if struck, get cancelled altogether (“'''co-co pops'''”). |