Lloyds Bondholders Lose £1 Billion Court Case

The Supreme Court rules that Lloyds Bank does not have to compensate investors with high-interest bonds 

Emma Simon 17 June, 2016 | 12:23PM
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Thousands of investors stand to lose valuable income streams after the Supreme Court ruled that Lloyds Bank (LLOY) was within its rights to redeem these bonds - and did not have to pay compensation.

This long-running legal battle surrounded the repurchase of £3.3 billion Enhanced Capital Notes (ECNs), which had paid interest rates of up to 11%.

These are effectively a type of bond, paying an enhanced interest rate. However, these credit notes could be converted into shares if the bank’s capital ratio fell to a certain level.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Lloyds Banking Group PLC46.52 GBX-0.08Rating

About Author

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for Morningstar.co.uk

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