What is Contingent Capital?
At its most basic, it is a debt instrument that converts into common equity during a period of financial strain, effectively shoring up a bank's capital position without diluting shareholders until it is needed.
Contingent Capital are funds that would be available under a pre-negotiated agreement if a specific contingency (such as a natural disaster) occurs or a threshold (such as the maximum price of a raw material or the minimum price of product) is crossed. In this off balance-sheet arrangement, a party pays a capital commitment fee to a second party which undertakes (in advance) to extend a loan or purchase debt or equity security of a certain amount in case a stated situation occurs. Thus, the first party does not transfer its risk (as in insurance, which affects the income statement) and does not have to show a liability on its books (as for a loan, which affects the balance sheet), but receives a critical capital injection exactly when it is needed without having to negotiate from a position of weakness. These arrangements take several forms, such as catastrophe equity put option, contingent surplus note, or standby loan.
'Contingent capital could become a meaningful and cost effective way to allow banks to develop a counter-cyclical form of capital capable of averting a future financial crisis,' said an executive at Municipal Guarantee Fund. Institutions like Municipal Guarantee Fund (http://www.MunicipalGuaranteeFund.org ) provides contingent capital to banks and insurance companies worldwide.
Advantages of Contingent Capital?
An executive at Municipal Guarantee Fund added 'Contingent capital would essentially allow banks to convert debt instruments into equity - or capital - in an emergency. This would make it much easier for them to boost their capital holdings during a time when capital markets might have frozen. Debt holders would likely take some sort of penalty, but the idea is that this is much better than letting the company collapse. And government officials believe that with debt holders aware of the possibility debt could be converted into equity, it could force more market discipline on big banks.'
Contingent Capital
Is capital One the company that offers secured credit cards for those with bad credit?
I really want to rebuild and there offering a capital one secured card.
Answer
Capital One is TERRIBLE, I would suggest going to any bank (your bank if you have one). Most banks have secured cards, not just Capital One. That'll be your best bet.
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There also used to be a bank named after this city but it was recently bought (and renamed) by Capital One.
Applying over and over again could damage OP's score from excessive hard inquiries, making it even harder to get a card. Best bet at this point would be a secured card through a bank, or maybe Capital One. I have little credit history myself, and what little I do have is not so great, but got a Capital One secured Mastercard to build positive history on a revolving account paying it off monthly. Within a year or so I can change it over to an unsecured account with a higher limit.
I had a family member who had similar luck right after a bankruptcy. Capital One seems to not mind risking $500 to possibly acquire a lifelong customer.