European banks issue more than €40 billion in CoCos in 2026

European banks have issued more than €40 billion in CoCo bonds in 2026, putting the year on track to set a record for the third year in a row.

Banks including Deutsche Bank, UniCredit, Crédit Agricole, Société Générale and Banco BPM have sold these bonds in recent weeks, while Santander, BBVA and Unicaja have issued €2.65 billion between them this year.

CoCos, also called AT1 bonds, were created after the financial crisis as a way for banks to absorb losses and recapitalise without relying on taxpayers.

They can be written off when a bank runs into trouble, making them riskier for investors than other bank debt.

Investors are drawn to their higher interest payments, which are currently around 6% to 8% for some bonds.

Before the current three-year run, European CoCo issuance reached €40 billion only once, in 2014; the figures cited for 2024 and 2025 were €43.5 billion and €45 billion respectively for January to October.