kaal:claim:2097160-013

The early trigger converts only the executives' portion of debt into equity, ahead of investors' contingent convertible bonds and while the entity is still sound on a micro-prudential basis, which is what makes it an early warning system rather than a recapitalization device.

Source quote, verbatim

The early trigger converts only the portion of executives' debt to equity, before investors' contingent convertible bonds are converted, when the entity is still sound on a micro-prudential basis.

From

Wulf A. Kaal, Contingent Capital in Executive Compensation (2012), V.B.1 Automatic Institution-Specific Early Trigger, p. 35
https://ssrn.com/abstract=2097160 · source PDF

Cite as

Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160

Holds when

entity still sound on a micro-prudential basis at the time of conversion

Classification

definitionalsupport: arguedcontingent-capital

Related claims

extended_by kaal:claim:2273857-056 Depending on their design, contingent capital securities can function as an early warning system that helps pr...

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