B&B debt holders denied payout
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Holders of Bradford & Bingley subordinated debt who suffered missed coupon payouts when the bank was nationalised have been told they will not be receiving compensation.
According to the Telegraph, the 2,000 holders of B&B’s £105m of Permanent Interest Bearing Shares have been informed in writing by independent valuer Peter Clokey that they will not be reimbursed for any missed payments.
Last June the bank was able to take advantage of rules within the Banking Code, which allowed nationalised banks to default on subordinated debt coupons in order to divert money towards paying off the Government loan. B&B is currently paying back the Government £14bn.
The Telegraph says pensioners mainly took out the bonds when the former building society demutualised in 2000. The issues, worth £52,000 each, paid out 13 per cent and 11.625 per cent.
Clokey says: “I have concluded that the B&B compensation scheme does not apply to PIBS.”
The B&B Action Group, which represents the bond holders, says it wants a Judicial Review against the Treasury for withholding the compensation.
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