Canada Pushes Embedded Contingent Capital

Recent Buzzes - VC Experts, Inc.

Essentially, OSFI would require all new non-common Tier 1 (perpetual preferred shares) and Tier 2 capital (subordinated debt) to contain features that would convert these instruments into common share equity when the bank is in serious financial trouble, instantly increasing the common share equity capital of the bank without the use of taxpayer money. Similarly, subordinated debt holders would have a two-stage conversion, which would be virtually simultaneous.

Fruugo Posts Net Loss Of 11 Million Euros in 2009 - Aims For Growth


Coupled with the existing equity of 11 million and a subordinated debt of 5.9 The balance sheet total at the end of 2009 was barely 1 million, including a short term debt of around 950,000.

Seed Capital Offerings

Recent Buzzes - VC Experts, Inc.

By its nature, common stock provides plenty of room in the business' capital structure for priority equity instruments like preferred stock and subordinated debt to be issued in later rounds. Angel investors sometimes propose to invest through a debt security, e.g. a "bridge note" or a short-term or demand note. An emerging business which is taking debt financing from angel investors should also recognize that the debt is characterized as a security for regulatory purposes.