Brush up on COCO Bonds

(Since Greece needs to do something like a Debt-for-Equity swap to reduce its debt)

Greece's drama could spur experiment with bonds that go "pop" - FT, pg. 22

Coco's or "contingent convertibles" are bonds that become "something else" in times of financial stress.

COCO's are helping Europe manage its outsized banking system, since many banks have issued bonds that turn into equity under stress. So they are liked by regulators and cash-strapped govts, that do not want to have to dip into their limit coffers to bailout banks

$288 billion in Cocos have been issued by banks since Lloyds began the trend in 2009

They offer higher yields, but there are questions as to whether the Risks are fully priced in

Yanis Varoufakis, the new finance minister of Greece, has pushed for the idea of replacing some of his country's debt, for bonds linked to the country's GDP (which looks something like equity to me)

Had such bonds been issued in the first place, it might have prevented the "high stakes poker game" that we are in now.