Anger as Pearl skips bond payout of £33m

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The life assurance zombie fund group has deferred the £33 million interest payment on a £500 million bond taken out two years ago by Resolution, the rival firm it took over.

The decision to withhold the payment of the bond coupon has enraged some bondholders, who are out of pocket and are questioning Pearl's attitude to its debt commitments, what the company's future bond payment policy is and even the state of the company's finances.

Pearl, also under attack for not being more forthcoming about restructuring plans, said it deferred the payment in light of market conditions.

It added that it has enough money to pay the bond interest but "decided to maintain an increased level of prudence in the current environment".

It is understood that Pearl is treating the Resolution bond, paying a coupon of 6.58%, as a subsidiary issue it is likely to deal with at some time in the future by buying back.