TY - BOOK ID - 85504644 TI - Can Contingent Convertibles Help Private Asset Managers Fund Their Acquisition of Non-Performing Loans from Portuguese Banks? PY - 2019 SN - 1498314406 1498314309 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Banking law. KW - Banks and banking KW - Law, Banking KW - Financial institutions KW - Law and legislation KW - Banks and Banking KW - Finance: General KW - International Taxation KW - Industries: Financial Services KW - Investments: Stocks KW - Contingent Pricing KW - Futures Pricing KW - option pricing KW - Financing Policy KW - Financial Risk and Risk Management KW - Capital and Ownership Structure KW - Value of Firms KW - Goodwill KW - Bankruptcy KW - Liquidation KW - Banks KW - Depository Institutions KW - Micro Finance Institutions KW - Mortgages KW - Taxation, Subsidies, and Revenue: General KW - General Financial Markets: Government Policy and Regulation KW - Pension Funds KW - Non-bank Financial Institutions KW - Financial Instruments KW - Institutional Investors KW - Finance KW - Public finance & taxation KW - Banking KW - Investment & securities KW - Nonperforming loans KW - Loans KW - Transfer pricing KW - Contingent convertible capital KW - Taxes KW - Financial sector policy and analysis KW - Stocks KW - Taxation KW - Financial services industry KW - Portugal KW - Option pricing UR - https://www.unicat.be/uniCat?func=search&query=sysid:85504644 AB - This paper analyzes the capital structure of private asset managers in which the acquisition of nonperforming loans (NPLs) is funded with Contingent Convertibles (CoCos) placed with investors. The paper develops a model based on NPL transfer prices and residual recovery rates to assess capital structures consisting of CoCos and equity. The CoCos would contain put and call options to write down losses and write up profits, respectively, arising from liquidation and restructuring procedures. The paper concludes that the protection mechanism provided by debt write-downs embedded in CoCos and the incentives to investors provided by debt write-ups could help bridge the gap between Portuguese banks’ NPL bid prices and private equity firms’ ask prices. ER -