Royal Bank of Scotland began a large scale debt exchange on Tuesday as the row over UK banks' tax avoidance schemes on such activity escalated. RBS is offering to buy-back GBP5.4bn equivalent of subordinated debt at a discount to par which will allow it to boost its capital through an accounting gain.
RBS said in a statement that any profits made by the issuer on the exchange offer would be subject to UK tax in accordance to UK rules. RBS is offering to buy the old securities from investors at a discount to par and swap them for new ones with an on-the-run coupon.
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