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US hedge funds attack ‘irresponsible’ Co-op Bank
by Alex Steger on Sep 03, 2013 at 09:30
A group of US hedge funds have criticised the Co-op Bank for not engaging with them ahead of restructuring its debt, according to the Financial Times.
The FT reported that Moelis & Company, an investment bank acting for bondholders including US hedge funds Aurelius Capital Management and Silver Point Capital, had attacked the Co-op after it said it would only negotiate with bondholders once it had finalised the terms of a £1 billion debt for equity exchange later this year.
The move means bondholders will have to convert existing debt holdings into a mixture of new bonds and equity.
Caroline Silver, a managing director at Moelis, told the Financial Times: ‘There are commercially reasonable ways to achieve this goal, but these require bondholder co-operation, which has consistently been offered. It would therefore strike us as irresponsible for the bank’s officers and directors to refuse to engage with bondholders and to waste time putting together a unilateral, take-it-or-leave-it offer.’
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