Can contingent capital CoCo bonds provide Covid-19 opportunities for schemes?

clock • 4 min read
CoCo bonds may present a mispriced opportunity to exploit
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CoCo bonds may present a mispriced opportunity to exploit

Covid-19 has led to a collapse in real yields, creating a double-whammy for schemes of falling returns and increasing liabilities. James Macdonald asks if CoCo bonds can provide an opportunity for schemes in such an environment.

Funding constraints remain the biggest single challenge for pension funds, and this has been exacerbated by the response to Covid-19. As of June the combined deficit of UK defined benefit schemes sat at...

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