B&B bonds offer dubbed 'derisory' (From Bradford Telegraph and Argus)

Campaigners say there should be an inquiry into decision to nationalise firm

9:30am Monday 22nd November 2010 in Business By Chris Holland

Campaigners for former Bradford & Bingley shareholders have dismissed as ‘derisory’ a recent offer by the nationalised lender to buy back bonds from investors.

The Bradford & Bingley Action Group, which is pursuing the interests of one million former shareholders in the company which was partly nationalised in 2008, said it was a ploy to maximise returns for the Government, now the sole shareholders.

Bradford & Bingley has offered the bondholders £3,800 and £3,600 respectively for every £10,000 of the 13 per cent and 11.625 per cent Perpetual Subordinated Bonds.

BBAG chairman David Blundell said this was only a few pence above the previous open market value and ignored the accrued unpaid interest.

He said B&B’s stated objectives in making these offers was to generate a profit which in the long term could be to the advantage of the Government and those bondholders who do not accept these offers.

Mr Blundell is hanging onto his bonds.

He said: “A key question is probably whether one trusts the Government to deal fairly and act not to prejudice the B&B investors’ interests in this matter.

“In this context the previous Government’s track record has been poor whilst the jury is still out on the Coalition.”

BBAG is pressing for a Treasury Select Committee inquiry into the nationalisation of B&B’s mortgage business and sale of the savings and branch business to Spanish bank Santander.