17/06/2013

Bonds For Shares Plan Unveiled To Save Co-op Bank

A rescue plan to fill a £1.5 billion hole in the Co-operative banks balance sheet has been unveiled.

A major part of the plan is to offer bond holders the chance to buy shares in the bank – a move to generate capital called a "bail in".

The plan will also see the bank listed on the stock market, and means both investors and the group contribute to the bank's recapitalisation.

Euan Sutherland told BBC Radio 4's Today programme that, "This is the best solution for all concerned."

It is understood that under the plan, bond holders will lose out in the short term, but no help will be needed from taxpayers.

If bond holders exchange their bonds for shares they will be secure a "significant minority stake" in the bank, allowing them to "share in the upside of the transformation of the bank".

(MH/CD)

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