Britain’s small investors have worked themselves into a lather over the terms of the bond exchange proposal outlined last week by Lloyds Banking Group, which they said was unfair.

Bondholders are angry that they risk being frozen out of the offer, which involves Lloyds swapping existing bonds, on which it has been barred by the European Commission from paying coupons, for new “enhanced capital notes”, or contingent convertible instruments. These would convert into higher-risk equity in the event that Lloyds’ capital base came under stress.