Moody's Looks to cash in on Lucrative CoCo business

摘要

Moody's is set to reverse course and begin rating the riskiest contingent capital bonds before the end of the summer, entering a market that has fast become too big, and profitable, to ignore. The ratings agency is seeking market feedback over the next month about expanding its ratings coverage of CoCos to include high-trigger bond instruments. Until now, it has only rated bonds that write down or convert to equity when a bank hits a 5.125% trigger. According to Moody's, contingent capital is now a much more transparent market with a broader investor appeal, which has driven it to re-evaluate its position.