EBS has been forced to include a notice in its most recent bond prospectus warning potential investors that the building society's members would rank equally with senior debt-holders in the case of default, bankruptcy or other losses.

The risk factor was put in at the request of investment bankers and ratings agencies who felt it was appropriate to point out to buyers that EBS members would be treated more like depositors than shareholders, who always rank last in publicly listed companies – meaning they take losses first.

EBS also notes in the prospectus that Moodys, the ratings agency, incorporates a risk factor that government action might be taken to prevent members' share acc­ounts being subordinated to senior debt in the event of a winding up of the building society.

However, it states this view is contrary to legal opinion and the terms of the bond itself.