This book attempts to answer the question of how CoCos differ from convertible bonds and how
these instruments are suitable for contributing as core capital under Basel III. The place
ability of CoCos and the challenges resulting from their use are discussed in this book.
Overall a comprehensive picture of the impacts resulting from the new capital definitions will
be created. The Background to the introduction of Basel III is described at the beginning of
the book in addition to a presentation of the Basel III document and the new capital
definitions. To create a kind of basic understanding of the functioning of convertible bonds
and CoCos hybrid capital will then be explained. In the following part of the book the design
options of CoCos and different interests of investor groups are shown. Then the Commerzbank AG
is analyzed by means of an analysis of how the capital components changed in Basel II through
to Basel III over the last two years. The effect of Basel III on hybrid capital will be
illustrated with a practical example. At the end of the book follows a short conclusion
regarding the potential impact of Basel III on hybrid capital and the new capital instrument
CoCos.
