BONDHOLDERS who stand to lose out under the Co-op Bank’s rescue plan are expecting MPs to probe the deal after the summer recess, they told City A.M. yesterday.
Mark Taber, who is campaigning on behalf of more than 1,600 Co-op bondholders, said he is “quite sure” the Treasury select committee is preparing to haul Co-op bosses into parliament as the political campaign on behalf of the affected investors begins to gather pace.
Two months ago regulators told the Co-op that it must plug a £1.5bn capital shortfall at its banking arm.
The group wants to achieve this by pumping in £1bn then asking bondholders to make up the remaining £500m. But many of the bondholders are retail investors who believe they were unfairly kept in the dark by the bank.
“There are all sorts of others ways they could raise this capital. The bank announced this [proposal] over six weeks ago and said they were mindful of their retail investors,” Taber said. “But since then they have not come out with a single other statement and lots of people have been panicked into selling in the market at a big loss.”
It is understood that discussions between the bank and bond holders will have to wait until after the bank’s first-half results on 29 August.