Lloyds bondholders head to the Supreme Court today, as they attempt to stop the bank from compulsorily purchasing bonds back at face value.
The bondholders, who won the right to have their appeal one day before the repurchase was due to take place in February, argue that the bank should pay a premium for the bonds to reflect the fact the notes still have nine years left before they mature, and deliver a double-digit annual return.
The bank issued a total of £8.3bn of enhanced capital notes in 2009, just as the financial crisis was at its most challenging, with a yield as high as 16 per cent reflecting how difficult it was for the bank to find lenders at that time.
Investors, many of whom are pensioners, will be unable to replace that income if they simply receive their money back on the bonds.
Lloyds insists that the small print gives it the right to buy back the debt at par.
Bondholders' interests are managed by a trustee company, BNY Mellon Corporate Trustee Services.
At the time the appeal hearing was granted, Mark Taber, who has led the bondholders' campaign, said: "The directors at Lloyds really do need to wake up and start acting with integrity here."