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Supreme Court backs Lloyds on bond redemption

The UK's highest court found in favour of the bank's decision to call in some enhanced capital notes.
June 21, 2016

Shares in Lloyds Banking (LLOY) enjoyed a 6 per cent bump after the UK Supreme Court ruled in favour of the bank's decision to redeem £3.3bn of enhanced capital notes at a below par price. The UK's highest court found the bank could call in the bonds early at face value.

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Investors had been earning as much as 16 per cent interest a year on the bonds. Lloyds argued the bonds no longer counted towards its capital reserves to meet regulatory requirements. This triggered a clause in the terms, which allowed the bonds' redemption, the banking group argued.