Troubled lender The Co-operative Bank PLC (LON:CBPP) is to cancel its listing of bonds in London as part of its plans for an equity capital raise and recapitalisation.
The Co-op Bank will cancel the listing of £206mln of subordinated notes due 2023 and the £250mln of fixed rate reset callable notes due 2025 on the London Stock Exchange (LON:LSE).
The lender said the de-listing of the notes, which is expected on 1 September, is conditional of its restructuring intended to save the lender from collapse.
Bondholders can apply for cash compensation before their investments are cancelled.
They are expected to receive compensation amounting to 45% of the face value of their bonds. However, the amount could be as little as 30% as the total amount payable has been capped.
Private investors in the 2023 bonds must apply to the bank to be eligible for the cash compensation, or else they will receive a worse deal in the form of shares in the bank’s parent group worth just 15%.
To be accepted for the compensation, bondholders must be “retail” investors - those who have less than £100,000 in the bonds at face value.
Last month the Co-Op agreed a £700mln rescue deal with its US hedge fund owners, meaning the bank will continue as a standalone entity after it abandoned plans to put itself up for sale.
The investors agreed to swap their debt for a stake in the lender and the deal was approved by the Bank of England’s Prudential Regulation Authority.