Europe's banks have seen their stock hammered over the past few days. One term that keeps on cropping up as financial sector equities take their rollercoaster ride is CoCo bonds, with investors concern centering on the banks' ability to pay them off.
Contingent convertible—or "CoCo" bonds differ from regular convertible debt in that they only convert to equity once a specified event has occurred, such as a share price hitting a certain level. They saw a record number of issuances last year, as central bank bond buying program forced government bond yields to record lows, sparking a fresh hunt for yield. Last year, issuers around the world launched 160 CoCo bonds according to data compiled by Dealogic for CNBC -- up from 109 in 2014.