Are 'risky' bonds and CoCo's becoming desirable again?

The bonds of financial institutions, specifically the more risky ones such as Additional Tier 1 (AT1) or 'CoCos', look particularly desirable again, according to Vontobel AM's Mondher Bettaieb.

In late July, the European Banking Authority announced the results of its stress test and on the very same day the European Central Bank (ECB) declared the results will not lead to a demand to increase the overall capital levels of banks. This was an important message, as earlier in the year there were doubts institutions such as Deutsche Bank had enough regulatory capital to pay coupons on their AT1 bonds, widening spreads considerably. The ECB went further than just reassuring words, by announcing they would adjust bank capital requirements. Causer: 'Bank debt has not looked this...