Northern Rock drops debt repayment

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Northern Rock, the nationalised British lender, has announced that it was stopping payment of coupons on some of its subordinated debt.

The announcement, made on Tuesday, will see holders of subordinated debt - which ranks below top-tier debt in troubled repayments, but pays a higher interest - incur heavy losses. Analysts at Société Générale, a bank, estimated the total outstanding value of notes affected were £1.65 billion ($2.7 billion).

The eight bonds affected are all perpetual, which means

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