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snoodog · 3192 days ago · link · · parent · post: Somethings rotten in the economy FED holds emergency meetings
Well the way bonds work is that as the company you only pay the issue rate (which was probably generous 6-8% but not that crazy 16%). The market yield is set by the discounting of the underlying asset. Obviously you shouldn't really issue more because it would be very costly but even then issuing more cocos should theoretically not affect your capitalization ratio because once you hit that magic threshold all the Co-Co bonds turn into equity shares with no underlying obligations.