# kaal:claim:1908473-034

**Claim.** A substantial voting rights increase at the second trigger could raise the cost of contingent capital securities, with issuers demanding premiums that push primary issuance toward institutional investors interested in the change of control possibility.

**Type.** failure  **Support.** argued

**Holds when.**

- Especially where the voting rights increase can reach the level of change of control

**Source quote.**

> Especially if the voting rights increase could reach the level of change of control over the entity, the premium charged by the issuers could rise dramatically and could result in a primary issuance to institutional investors who have an interest in the change of control possibility.

**From.** Wulf A. Kaal, Christoph Henkel, *Contingent Capital with Sequential Triggers* (2011), V. CONSTITUENT INCENTIVES, page 46

**Cite as.** Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473

**Verify.** sha256 of source PDF `9d578dac663357529edd1f6453fcfe69bdc59ac882408d9edfde5a4c2916befa` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Henkel%20-%202011%20-%20Contingent%20Capital%20with%20Sequential%20Triggers.pdf

**Failure mode.** voting-rights-premium-cost  (family: trigger-design-failure)

**Topics.** economics, institutional-design

**Keywords.** marketability, issuance-cost, institutional-investors, change-of-control

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