Allen & Overy (A&O) has taken the headline advisory role on the Co-operative Group's £1.5bn debt restructuring deal for its banking arm, ahead of a listing on the London Stock Exchange.

The group today (17 June) announced a plan for its bondholders to help recapitalise The Co-op Bank, putting forward a deal which will see the group's junior securities holders offered shares in the bank.

Under the terms of the agreement, holders of £1bn of debt will be asked to swap it for shares in the bank and bonds in the group.

The overall restructuring plan will raise £1bn this year and another £500m in 2014, taking capital to levels above those set by UK regulators.

A&O is advising on both the restructuring and the listing of shares, with the magic circle's global head of financial institutions Alistair Asher and senior finance partner Mark Sterling leading a team that includes Richard Slynn, the head of the firm's building societies and mutual practice.

Additional support is being provided by corporate finance partner David Broadley and debt capital markets partner Matthew Hartley. Regulatory, tax and pensions advice is being led by partners Etay Katz, Vimal Tilakapala and Dana Burstow, respectively.

The head of A&O's insurance group, Philip Jarvis, is leading on the announced plan to dispose of the Co-operative's general insurance business, which media reports have valued at around £240m.

As part of the capital raising, the Co-op Group earlier this year sold the life insurance business of its banking arm to Royal London for £219m, with Clifford Chance (CC) and Linklaters acting for the seller and acquirer respectively. CC has a longstanding corporate relationship with the Co-op.