PIBS bond holders to miss out on compensation

By Philip Aldrick Published: 10:36PM GMT 07 March 2010

Peter Clokey, the eccentric valuer who will confirm either B&B"s shareholders and bondholders are entitled to compensation, has created to the holders of "perpetual subordinated notes" to discuss it them that they do not qualify.

The holders are mostly pensioners who paid for the holds when the buy-to-let debt lender was still a construction society, prior to it floated in Dec 2000. In total, the 2,000 investors paid for �105m, or �52,500 each, of what were afterwards called permanent seductiveness temperament shares (PIBS).

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The seductiveness paid, of 11.625pc and 13pc on the dual apart issues, supposing a critical income tide for most families.

The Government cancelled the coupons in Jun last year and the PIBS are right away trade at a small fragment of their strange price. News that they will right away no longer validate for remuneration is expected to strike the investment even harder, serve wiping out savings.

Compensation was one approach PIBS holders competence have recovered a little of their investment. However, in his letter, Mr Clokey says: "I have resolved that the B&B remuneration intrigue does not request to PIBS."

PIBS holders, who are being represented by the B&B Shareholders Action Group (BBAG), are right away deliberation rising a legal examination opposite the Treasury. Charles Fussell, whose organisation is representing BBAG, has created to Mr Clokey requesting construction and will be looking acknowledgment of the preference from the Treasury.

Under the conditions of the bank"s nationalisation in Sep 2008, bondholders will not get any income behind until B&B has wholly repaid the �14bn due to the Financial Services Compensation Scheme and �4bn due to the Government, with interest. It is expected to be most years prior to it is transparent either bondholders will embrace a penny.

There is a little doubt over either Mr Clokey will be means to endowment shareholders any remuneration but profitable bondholders out in full. Technically, equity investors contingency be wholly wiped out prior to bondholders take any strike at all.