Co-op agrees deal to fill £1.5bn capital void

The Co-operative Bank has reached agreement with the Prudential Regulation Authority (PRA) to plug a £1.5bn capital hole in its balance sheet.

The bank, which saw its debt downgraded to junk status last month, will raise cash via a ‘bail in' - a process where loans to the group are converted into shares which will be listed on the London Stock Exchange. Though bondholders are expected to lose out in the short term, the Co-op said that, by exchanging their bonds for shares, they will gain a "significant minority stake" in the bank, allow them to "share in the upside" of the future. Speaking to BBC's Radio 4 this morning, group CEO Euan Sutherland said: "This is good news for the Co-operative Bank." Speculation about the ba...