Ignis to exchange £40m of Northern Rock leverage

Ignis plans to exchange up to £40m in subordinated Northern Rock debt after the nationalised bank outlined plans to buy back the bonds at more than double previous trading levels.

Chris Bowie, the head of credit portfolio management, says as the debt up for conversion was paying no coupon, it made sense to take up the offer. Northern Rock has offered holders of $1.55bn (£1.06bn) of dollar bonds and £200m of sterling bonds exchange at 25p in the pound for the deeply subordinated Tier 1 debt. "The 25p figure was an unexpected boost from the Government," Bowie says. "It was marked in the late single digits or early teens, and we had not expected much upside on these bonds at all." Ignis has about £98m of Northern Rock debt across its portfolios. "The majo...