Anglo's €750 million bond

ei.sdraob

Theres an interesting article over on irisheconomy

The facts: On Monday, January 31st, Anglo Irish Bank are going to pay out on a maturing bond worth €750 million. (For reference, the total cut in this year’s welfare budget will be €873 million.) The investors who purchased this bond invested their money with Anglo on the 17th of January 2006. The bond is senior unsecured debt and is not covered by a state guarantee.

The questions: Should the government have passed legislation this month to allow the Minister for Finance to intervene so that the bank did not pay this bond back? And if so, should the next government pass such a bill in relation to the remaining €4 billion or so in outstanding unguaranteed bonds owed by Anglo and INBS?

So how do you feel about defaulting on these (in a true capitalist fashion i believe they invested their money in a risky investment so tough)?

Wonder what the campaigning politicians will make of this? Will people be asking politicians about Anglo et al. when they show up on doorstep??

Tea drinker

ei.sdraob wrote: »

Theres an interesting article over on irisheconomy



So how do you feel about defaulting on these (in a true capitalist fashion i believe they invested their money in a risky investment so tough)?

Wonder what the campaigning politicians will make of this? Will people be asking politicians about Anglo et al. when they show up on doorstep??

I would cut it in half at least. They didn't do their homework on the investment. I got burnt with shares meself once, I learnt a lot ;-)

ei.sdraob

Tea drinker wrote: »

I would cut it in half at least. They didn't do their homework on the investment. I got burnt with shares meself once, I learnt a lot ;-)

Yeh same % cut as the shareholders in the bank got

Liam Byrne

Would it explain Cowen not relinquishing power until Tuesday ?

And would any of the other parties have the balls to stop this disgrace ?

More to the point, why isn't THIS plastered all over tomorrow's papers instead of pointless polls about how some gullible idiots are falling for FF's change-of-leader stunt ?

later12

ei.sdraob wrote: »

So how do you feel about defaulting on these (in a true capitalist fashion i believe they invested their money in a risky investment so tough)?

Buying senior debentures is not considered a risky investment. It is similar to despositing physical money in a bank. Junior bonds, ok, they took a risk in the hope of achieiving a higher return, so let them take a loss. But personally I think that forcing a loss on senior debt would set a risky precedent that could have serious repercussions for Ireland in the long term.

I have no doubt that a situation will be reached whereby Ireland will be able to repay discounted amounts on its senior banking debt, perhaps over the coming year. But for the moment, there is no such mechanism and this isn't the time for Ireland to try to be a hero. .

ei.sdraob

later10 wrote: »

Buying senior debentures is not considered a risky investment.

low risk != no risk

later10 wrote: »

It is similar to despositing physical money in a bank..

says who

later12

ei.sdraob wrote: »

low risk != no risk

You could say the same for Joe Public depositing his pay cheque in his local BoI branch on a Thursday evening. The risk is enitrely minimal, nobody would seriously refer to any such senior investment as ''risky''. Risktakers simply do not invest in these types of senior debentures apart from perhaps with the intention of sheltering their risky investments.

says who

Bank resolution law pretty much everywhere in Europe, it is the principle of pari passu. It might change in future, in fact it will almost certainly be open to change from 2013 onwards, but for now the principle very much remains.

Beau

I was absolutely shocked that this was paid out. Can't believe its not getting more coverage. Maybe I don't understand it well enough but I don't understand how a bank like Anglo can pay anything back. I emailed my local candidates but am yet to get a response from anyone.