The Bank of Cyprus has provided “a blueprint” for opening up contingent convertibles – a fledgling type of bond introduced to deal with new regulatory constraints – to a new investor base, with the introduction of a “CoCoCo”.

Contingent convertible bonds have emerged in the past two years as a way for banks to raise cash, while ensuring bondholders are also exposed to losses should financial firms run into trouble. The structure allows for the bonds to convert into equity at a set point when the bank's financial position deteriorates, thereby giving the firm a balance sheet boost.