Drug Scandal to Spur Co-Operative Bank Bond Swap: U.K. Credit
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Allegations that Paul Flowers, the former Co-Operative Bank Plc chairman, bought crack cocaine and crystal methamphetamine may assist the lender in securing enough support from bondholders to approve its overhaul today.
The lender, which is trying to plug a 1.5 billion-pound ($2.5 billion) capital shortfall, needs two-thirds of holders of its undated junior debt to vote on a debt-for-equity swap for it to be valid, according to company filings. Of those, 75 percent need to vote in favor by 4:30 p.m. London time today to get the best terms. There’s a later deadline on Dec. 6 offering less per bond.