Co-operative exercises option to exchange bonds and preference shares

By Caroline Salls

Pittsburgh, Dec. 18 - Co-operative Bank plc will exercise an option for a mandatory exchange of its 13% perpetual subordinated bonds, 5.5555% perpetual subordinated bonds and 9¼% noncumulative irredeemable preference shares to Co-operative Group Ltd., according to a news release.

The settlement date for the exchange will be Dec. 20.

The bank said it entered into a first supplemental trust deed with bond trustee Law Debenture Trust Corp. on Monday that gives Co-operative Bank the right to exercise a mandatory exchange to Co-operative Group at the bank's option and without the consent or approval of the trustee or bondholders.

In addition, the bank said preference shareholders passed an extraordinary resolution that granted the mandatory exchange option in connection with the shares.

Co-operative said bondholders and preference shareholders who made a valid election for final repayment notes or installment repayment notes in accordance with its liability management exercise will be eligible to receive their elected securities. Bondholders who did not make a valid election will be eligible to receive final repayment notes.

Co-operative Bank is a Manchester, England-based bank and financial institution.

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