Co-op Bank bond investors: act now or get just 15p per £1

Holders of Co-operative Bank bonds have just weeks to apply for cash compensation before their investments are cancelled as part of a restructuring intended to save the stricken lender from collapse.

Bondholders who apply for the compensation are expected to receive 45pc of the face value of their bonds, although the amount could be as little as 30pc because the total sum payable has been capped.

Only bonds issued by the Co-op Bank that pay an 11pc “coupon” and were due to be repaid in 2023 are affected; bonds issued by the Co-op Group are not involved in the restructuring and holders will continue to be paid according to the terms.

These bonds have nothing to do with deposit accounts or other savings accounts provided by the bank.

Crucially, private investors in the 2023 bonds must identify themselves to the bank in order to be eligible for the cash compensation. Anyone who fails to do this, or is not eligible because their holding is too large, will receive a worse deal in the form of shares in the bank’s parent worth just 15pc of the face value of their bonds.

To qualify for the cash compensation, bondholders must be “retail” investors, which the bank regards as those who have less than £100,000 in the bonds at face value.

Such investors must make the bank aware of their “retail” status before August 30. Those who hold bonds via a stockbroker such as Hargreaves Lansdown should do this via the broker concerned. Investors who have certificates should write to the bank’s registrar, Computershare (address below), returning the certificate at the same time.

If you do nothing you will be regarded as a “non-retail” investor and be eligible for the less generous compensation package of 15pc of face value in shares.

More information is available from Lucid Issuer Services on 0300 303 3491.

Certificated bondholders should write to Computershare Investor Services, Corporation Actions Projects, Bristol BS99 6AH.