Plans to merge Yorkshire Building Society and Chelsea Building Society include an offer to exchange the latter's subordinated bonds into contingent-capital convertible bonds. "Given that Chelsea's subordinated debt has been trading at around 35 pence in the pound, it seems likely that the exchange will be approved," CreditSights said in a note. The deal is the second in the UK involving CoCo bonds. Lloyds Banking Group issued £9 billion in CoCos last month.

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