Do you own Co-op preference shares or bonds?

People who have savings accounts*  or a mortgage with the Co-op don’t need to worry about the Co-op’s current problems. But holders of preference shares, PIBS or bonds may well be badly affected, with figures of 30% losses being talked about.

The Co-op has said there are less than 5,000 ‘retail investors’ affected. It appears that their estimate is taken from the number of people on the share registers, but this ignores the fact that most holders will be using their broker as a nominee account and so will not appear on the register as individual holders.  Mark Taber, who ran a succesful action group for Bristol and West PIBS holders who were affected by Bank of Ireland problems, thinks that there are more likely to be over 15,000 Co-op retail investors affected.

Many of these investors will be elderly as PIBS were seen as a comparatively safe long term holding for pensioners. If you don’t have any it is possible that your parents may, and it is possible that they don’t realise they will be affected as they bought Britannia PIBS and the news headlines are about the Co-op.

Mark Taber is gathering a list of people holding these instruments. At this stage it seems that the Co-op has not decided exactly how retail holders will be treated and an informed collective voice could be useful in influencing them. To add your name to the list, complete this form .

The Motley Fool’s Banking Sector discussion board has a lot of comments about the Co-op. Mark posts there as OldBoyReturns. This thread covers the possibility of setting up an Action Group and getting together a list of holders.

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EDIT – after pressure from bond holders, small and large, the Co-op has completely restructured their offer.  The new offer is described in full on the Co-op website here.

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* assuming you have less than the FSCS £85,000 compensation limit

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  1. UPDATE – Mark Taber has added more information about the Co-op situation on his Fixed Income website here http://www.fixedincomeinvestments.org.uk/fixed-interest-blog/troubleattheco-op

  2. Michael Littler says:

    I invested £20,000 in the Co-Operative 13% PIBS in January 2013 based on a recommendation in the Investors Chronicle.
    Normally I would not have chosen such a high interest rate investment because of the risk factor, but being The Co-Op I mistakenly thought they were an ethical, and a rock solid Organisation.
    I am a pensioner, 78 years of age and can ill afford to lose this sort of money.

    • Anne emery says:

      Me too, plus i have never received the 13% interest pay out that only came into play when the bonds dropped. Like you, I understood the Co-op to be a safe organisation and it was only as a desperate measure to boost my income , that I added a further £5000 investment in March. I understood the risks of pibs investment, but this a very serious loss we are facing, 70% of our capital.

  3. We invested £20,000 in two Co-op bonds. Fortunately we sold one £10,000 bond last year but we still have £10,000 at risk. We are both pensioners, I am partly disabled and we rely heavily on income like this as our ‘private’ pension. This came as a terribel blow to us and will impact on the rest of our lives.

  4. Michael, Anne and John – if you haven’t done so already, can I encourage you to sign up to Mark Taber’s list of Co-op bond holders here https://docs.google.com/forms/d/18wc3Rg7_JwFIw18ZVrKymR_HHQqjru7o1tsca1hQMuE/viewform. he now has over 1,600 small investors on the list – many of them like you are pensioners and reliant on the interest from these bonds.

    He now has a more detailed campaign page here http://www.fixedincomeinvestments.org.uk/home/co-op-bank-retail-investors-campaign.

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