The Co-operative Bank p.l.c. announces the deferral of interest on its 5.5555% Perpetual Subordinated Bonds and payment in kind of its 9.25% Preference Shares dividend
04 November 2013
The Co-operative Bank p.l.c. announces the deferral of interest on its 5.5555% Perpetual Subordinated Bonds and payment in kind of its 9.25% Preference Shares dividend The Co-operative Bank p.l.c. (the “Bank”) has today announced details of its liability management exercise (the “Liability Management Exercise”) in respect of certain of its subordinated capital securities, which include the following securities:
- 9.25% Non-Cumulative Irredeemable Preference Shares (ISIN: GB0002224516) (the “Preference Shares”);
- 5.5555% Perpetual Subordinated Bonds (ISIN: GB00B3VMBW45) (the “5.5555% Bonds”); and
- 13% Perpetual Subordinated Bonds (ISIN: GB00B3VH4201) (the “13% Bonds”)
The Bank has taken certain decisions with respect to dividends and interest payments on the Preference Shares, 5.5555% Bonds and 13% Bonds in connection with the Liability Management Exercise. These decisions are described below.
The next instalment of the Preference Share dividend is scheduled to be paid on 30 November 2013.
Under the terms of the Preference Shares, the Bank will not be permitted to pay the dividend in cash, but will instead be required to allot additional Preference Shares to each holder of Preference Shares in lieu of cash payment (“Additional Preference Shares”). The Bank expects to allot such Additional Preference Shares on 29 November 2013 (since 30 November is a Saturday). The allotment of additional Preference Shares in lieu of cash will satisfy the Bank’s obligations in respect of such dividend instalment and holders of Preference Shares will not be entitled to any cash amount in respect of that dividend.
However, if the Liability Management Exercise successfully completes, the Additional Preference Shares will be transferred to Co-operative Group Limited upon completion of the Liability Management Exercise and the holders will receive an amount in cash equal to the cash dividend which the Bank would have paid on 29 November 2013 had it been able to do so under the terms of the Preference Shares.
The next scheduled interest payment date for the 5.5555% Bonds is 14 December 2013. The Bank intends to defer that interest payment (which it is entitled to do under the terms of the 5.5555% Bonds). If the Liability Management Exercise subsequently successfully completes, the Bank will pay that deferred interest payment to all holders of the 5.5555% Bonds.
The Bank reconfirms that, as it announced on 12 July 2013, upon successful completion of the Liability Management Exercise the Bank will pay, to all holders of the 13% Bonds, the deferred interest payment on the 13% Bonds originally scheduled for 31 July 2013.