kaal:claim:2097160-033

Contingent convertible bonds with a conversion feature add what plain inside debt lacks: an early warning system and a buffer before insolvency that can help the entity avoid default.

Source quote, verbatim

Contingent convertible bonds with a conversion feature offer the additional benefit of creating an early warning system and a buffer before insolvency that can help an entity avoid default.218

From

Wulf A. Kaal, Contingent Capital in Executive Compensation (2012), VI.A Contingent Capital as Inside Debt, p. 55
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

conversion feature rather than write-down
trigger set before insolvency

Classification

mechanismsupport: arguedcontingent-capital

Related claims

restated_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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