U.S. hedge funds met with officials at the PRA last week for talks about the future of Co-op Bank.
Hedge fund representatives have opened dialogue with City watchdogs about the terms of a rescue deal for the struggling lender.
Sources say that a committee of bondholders in the Co-op Bank and its advisers met officials from the Prudential Regulation Authority (PRA) last week to discuss the level of new capital required to secure a financial restructuring.
Earlier, Blue Mountain Capital Management, Cyrus Capital Partners, GoldenTree Asset Management and Silver Point – had used the meeting with the PRA to argue that the Co-op Bank needs a lower sum than the company has previously indicated. Hedge funds had tabled a proposal to the Co-op Bank that would involve pumping substantial sums into it.
Details of their proposal remain unclear, although it would involve the provision of a smaller sum than the GBP 300mn of new equity that the Co-op Bank had previously signaled it would require.
Read more at Sky News.