A VIP reader of this board, who helped me greatly in negotiating the deal for retail investors in the Co-op Bank restructuring, has quite rightly pointed out that a post titled ‘Co-op Bank 3 years on’ should take a look at how the “pensioner / retail outcome” has fared vs the “hedge fund” outcome. So here goes.

At the start of negotiations the proposal was that the lower ranking subordinated bonds and preference shares (largely held by retail investors) would get Co-op Bank equity while the higher ranking subordinated bonds (largely held by hedge funds) would get new bonds in Co-op Bank.

I could, and probably should, write a book about what happened next. But for now, to cut a long story short, we managed to negotiate this round to retail getting new Co-op Group bonds while hedge funds got bank equity and bank bonds. The equity was issued in exchange at about £5 a share with the ‘promise’ of a future listing. Still no sign of that listing and £1 a share would be optimistic if you could find a private buyer. Meanwhile the ‘new’ Co-op Group bonds currently trade at around 130 while the ‘new’ Co-op Bank bonds trade at around 80.

So the retail / pensioner outcome has proved to be quite miraculous despite being achieved against all the odds.