Moody’s upgrades Lloyds CoCos

Return to profitability for UK bank provides ratings fillip for first-generation contingent bonds

As investors wait for the next batch of Barclays contingent capital bonds, Moody’s has upgraded the ratings of Lloyds’ CoCos, following a positive set of results for the UK bank.

Lloyds pioneered the asset class in November 2009 when it exchanged existing bonds for two Enhanced Capital Notes, which convert to equity should the bank's Core Tier 1 capital ratio fall below 5%.

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