It stands for contingent capital note; a type of contingent convertible (CoCo)- contingent convertible bond– that is designed to automatically recapitalize systemically important financial institutions (SIFIs) during periods of distress. The note is subordinated to other liabilities and automatically convert into common stock of the issuing financial institution under certain conditions, particularly, if the price of the underlying stock drops below a certain point (the note would convert into shares, thus ending noteholders’ rights to payments of interest and principal against obtaining the rights associated with the shares received, including the rights to dividend payments).
Contingent capital notes (CCNs) are part of a bank’s contingent capital.
