The Co-operative Bank is now owned by 70% of its bondholders, with the Co-operative Group holding the remaining 30%.
The liability management exercise has raised £1bn of tier 1 capital from bondholders, alongside £333m of funds from the Co-operative Group and £40m of interest savings towards the £1.5bn needed to fill the capital shortfall.
In a statement, the Group said it is confident a further £127m will be raised this year to meet the full £1.5bn to complete the recapitalisation plan.
On the date of completion on 20th December, Euan Sutherland, the Group’s chief executive, said: “Today we have taken a major step forward in securing the future of the Co-operative Bank, with the support of our investors. In putting together this plan, we listened to all our stakeholders and worked to protect the interests of customers and members while avoiding a taxpayer bail-out. The Co-operative Group has played its part with the contribution of substantial funds, including a targeted solution to meet the needs of retail bondholders.
“The Co-operative Group remains the Bank’s single largest shareholder and we look forward to working with other investors and the strengthened management team to ensure the Co-operative Bank moves forward, while remaining true to its ethical heritage.”
The Bank’s Chief Executive, Niall Booker, commented that “there is much work to do”, but applauded the “successful conclusion” of “Europe’s first voluntary, non-taxpayer funded bail-in”. He added: “We have set out a clear strategy, with a smaller, de-risked Bank, focused on retail and small and medium sized businesses and we will now deliver that, building on the Co-operative Bank’s heritage.”