LONDON (Reuters) - Britain’s Co-operative Bank said on Friday retail bondholders will get back less than half the face value of their investment in a restructuring aimed at saving the lender from collapse.
Those impacted are holders of Co-op Bank subordinated bonds which paid an 11 percent coupon and were due to mature in 2023. The bank said they will receive about 4.50 pounds ($5.83) for every 10 pounds they had invested in the bonds.
The bank has said a restructuring and recapitalisation plan agreed in June would provide much greater capital strength, with its core capital ratio expected to rise to between 22 and 23 percent by the end of the year, double the level from June.
Co-op Bank, which provides banking services to almost 4 million retail and small and medium-sized enterprises, put itself up for sale in February after its capital base dipped to levels unacceptable to Britain’s financial regulators, as it grappled with restructuring costs and weak income.
($1 = 0.7715 pounds)
Reporting By Andrew MacAskill; editing by Simon Jessop