| Updated:
Braford & Bingley’s bid to defer bond interest could be repeated
BRADFORD & Bingley (B&B) has said it will not pay interest on £325m of subordinated bonds, fuelling speculation that other nationalised lenders such as Northern Rock might follow suit.
The bank said last night that it would not pay interest on three tranches of notes, £150m of floating rate notes due on 30 June, £125m of 6.625 per cent notes due on 16 June and £50m worth of 11.625 per cent bonds due on 20 July.
B&B was only able to defer payments after the Treasury changed the rules earlier this year to permit deferrals on lower Tier 2 debt.
The bank has not yet decided whether it will defer future payments. The change has sparked concerns that other state-backed firms, could echo the move.