Royal Bank of Scotland (LON:RBS) has announced that it has completed the pricing of two issues of contingent convertible bonds, or CoCos.

The bonds were announced after their positive quarterly results last Thursday, becoming the last of the major UK banks to fofer a bond of this type. The bond will convert into equity if the bank’s CET1 ratio drops below 7%.

The move will raise £1.98 billion to bolster the bank’s capital. The offer is due to close on Aug. 10.

“This is another important step in the road towards becoming a much stronger, safer bank for our customers and shareholders. Improving our capital resilience has been an integral part of our plan and we are well on track to achieve this,” Chief Executive Ross McEwan said in a statement.

The bank also said that they will buy back shares or pay a dividend to shareholders, but not until 2017.

The government began selling off its share in RBS earlier this week, attracting criticism for the decision to sell the shares at a loss.

 

Miranda Wadham on 06/08/2015