Credit Suisse considers early issue of coco bonds

The CEO of Credit Suisse hopes to begin issuing billions of dollars in contingent-capital bonds in the next year to strengthen the bank's balance sheet ahead of ahead of Basel III, the Financial Times reports.

Credit Suisse has until 2019 to meet new contingent capital rules under Basel III, but Brady Dougan says the investment bank aims to issue the ‘coco bonds' to assure investors and regulators there is enough demand for the debt.

Cocos work by converting debt into equity or other capital in the event a bank begins to struggle financially.

"I certainly hope that during the course of next year we can do something," he says. "We have actually received a lot of reverse inquiries that said ‘If you're going to issue these we'd be very interested in looking at them'."

The FT reports the bank may issue as much as $30bn in cocos over several years to replace a portfolio of hybrid securities that will no longer qualify as capital under new Basel committee rules.

Meanwhile the CEO hit back at critics of the firm's one-off payments to staff whose bonuses had been slashed to avoid a 50% supertax. Dougan said the move was needed to prevent rival banks poaching key staff.