{"id":107,"date":"2013-06-20T07:39:04","date_gmt":"2013-06-20T07:39:04","guid":{"rendered":"http:\/\/asadkarim.co.uk\/?p=107"},"modified":"2013-06-20T07:39:04","modified_gmt":"2013-06-20T07:39:04","slug":"the-debt-laden-co-operative-bank","status":"publish","type":"post","link":"https:\/\/www.asadkarim.co.uk\/?p=107","title":{"rendered":"The Debt Laden Co-Operative Bank"},"content":{"rendered":"<p>The Co-Operative Bank The restructuring of Co-Op Bank shows how exposed the bank had become. A classic example of excessive borrowing during good times, but when the economic times got tough, the debt burden was simply too much. (over leverage)<\/p>\n<p>[<a title=\"Co Op Restructuring\" href=\"http:\/\/www.cooperativebank.co.uk\/customerservices\/announcements\/recentannouncements\/outcome-of-review-june-2013\" target=\"_blank\">http:\/\/www.cooperativebank.co.uk\/customerservices\/announcements\/recentannouncements\/outcome-of-review-june-2013<\/a>]<\/p>\n<p>When one looks at the all bonds that are being re-structured:-<\/p>\n<p>*<strong>9.25%<\/strong> Non-Cumulative Irredeemable Preference Shares GB0002224516\u00a0 <strong>\u00a360,000,000<\/strong>\u00a0 Tier 1<br \/>\n\u00a0<br \/>\n<strong>13%<\/strong> Perpetual Subordinated Bonds\u00a0 GB00B3VH4201\u00a0 <strong>\u00a3110,000,000\u00a0<\/strong> Upper Tier 2<br \/>\n\u00a0<br \/>\n<strong>5.5555%<\/strong> Perpetual Subordinated Bonds\u00a0 GB00B3VMBW45\u00a0 <strong>\u00a3200,000,000<\/strong>\u00a0 Upper Tier 2<br \/>\n\u00a0<br \/>\nFloating Rate Callable Step-up Dated Subordinated Notes due 2016\u00a0 XS0254625998\u00a0 <strong>\u20ac34,980,000\u00a0<\/strong> Lower Tier 2<br \/>\n\u00a0<br \/>\n<strong>5.875%<\/strong> Subordinated Callable Notes due 2019\u00a0 XS0189539942\u00a0 <strong>\u00a337,775,000<\/strong>\u00a0 Lower Tier 2\u00a0<br \/>\n\u00a0<br \/>\n<strong>9.25%<\/strong> Subordinated Notes due 28 April 2021\u00a0 XS0620315902\u00a0 <strong>\u00a3275,000,000<\/strong>\u00a0 Lower Tier 2<br \/>\n\u00a0<br \/>\nFixed\/Floating Rate Subordinated Notes due November 2021\u00a0 XS0274155984\u00a0 <strong>\u00a38,747,000<\/strong>\u00a0 Lower Tier 2<br \/>\n\u00a0<br \/>\n<strong>7.875%<\/strong> Subordinated Notes due 19 December 2022\u00a0 XS0864253868\u00a0 <strong>\u00a3235,402,000<\/strong>\u00a0 Lower Tier 2<br \/>\n\u00a0<br \/>\n<strong>5.75%<\/strong> Dated Callable Step-up Subordinated Notes due 2024\u00a0 XS0188218183\u00a0 <strong>\u00a3200,000,000<\/strong>\u00a0 Lower Tier 2<br \/>\n\u00a0<br \/>\n<strong>5.875%<\/strong> Subordinated Notes due 2033\u00a0 XS0145065602\u00a0 \u00a3150,000,000\u00a0 Lower Tier 2<\/p>\n<p>[* &#8211; Tier 1 is the most junior ranking of Target Securities. Lower Tier 2 is the most senior ranking of Target Securities]<\/p>\n<p>Count these numbers and guess what you get :- \u00a31,306,782,200 (<strong>\u00a31.306 Billion<\/strong>) of debt that is crippling the bank.\u00a0The interest rate on some of these bonds is <strong>9.25%<\/strong> and thus the interest repayments are effectively breaking the bank.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Co-Operative Bank The restructuring of Co-Op Bank shows how exposed the bank had become. A classic example of excessive borrowing during good times, but when the economic times got tough, the debt burden was simply too much. (over leverage) [http:\/\/www.cooperativebank.co.uk\/customerservices\/announcements\/recentannouncements\/outcome-of-review-june-2013] When one looks at the all bonds that are being re-structured:- *9.25% Non-Cumulative Irredeemable [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-107","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/107","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=107"}],"version-history":[{"count":1,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/107\/revisions"}],"predecessor-version":[{"id":108,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/107\/revisions\/108"}],"wp:attachment":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=107"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=107"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=107"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}