U.K.’s Co-Op Bank Sees Subordinated Debt Fall 26% on Ratings
This article is for subscribers only.
Co-Operative Bank Plc, which traces its roots to Britain’s 19th-century industrial north, saw its subordinated debt plunge after a downgrade to junk triggered speculation junior bondholders may be forced to take losses.
The company’s 275 million pounds ($423 million) of 9.25 percent subordinated notes due April 2021 fell 27 pence to 74.9 pence on the pound, according to Bloomberg prices. The have been quoted above par since July. The lender was cut six steps by Moody’s Investors Service to Ba3, which cited the potential for losses on real estate loans and low levels of provisions for future impairments.