DOI: https://doi.org/10.18371/fcaptp.v2i25.120759

FEATURES OF ISSUE BANKING CONTINGENT CONVERTIBLE SECURITIES

I. S. Kravchuk

Abstract


The specific characteristics of contingent convertible securities (activators, coupon rate, maturity, transformation mechanism) in connection with the financial soundness management of banking institutions, their impact on the stability of the negotiable financial instruments market, as well as the prospects for building the market of these securities in Ukraine were examined in the article.

The role of conditional convertible bonds in the international financial system is ambivalent – on the one hand, these instruments are issued to ensure banking system stability, and on the other there is the probability of a negative impact on the market stability and investors under the activation conditions on the conversion/principal writedown.

In Ukraine the construction of contingent convertible securities is premature, because for the market development of instruments with condition of probable principal writedown has no demand from investors, and the additional limiting factor for contingent convertible bonds with condition of conversion into shares is the almost complete absence of banking shares market.


Keywords


contingent convertible securities, bank, lossabsorption, conversion, capital.

References


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ISSN (print) 2306-4994, ISSN (on-line) 2310-8770