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AIB HAS REVEALED that it has saved the taxpayer approximately €1.6bn through its moves to partially burn its junior bondholders.
Preliminary results of the bank’s plans to enforce a burden-sharing plan on its subordinated bondholders – approved by the High Court last Thursday – show that many junior bondholders have accepted the bank’s offer to buy back their bonds at a significant discount.
86 per cent of the junior bonds eligible for the programme are to be cashed in – with the end result being that the bank has created €1.6bn of capital, reducing the public’s bill for keeping AIB afloat.
Two of the bank’s 16 current types of junior bonds are still the subject of a legal challenge from the Aurelius Capital Management group, which is fighting in the High Court to stop AIB from writing down the value of their investments.
On Thursday the court ruled that only the two types of bonds owned by Aurelius were subject to the legal challenge, meaning AIB could proceed with its plans for the vast majority of its junior bondholders.
Finance minister Michael Noonan said he welcomed the announcement, and said he expected further phases of AIB’s burden-sharing measures to further cut the amount required from the public.
Noonan affirmed that the government intended to pursue similar measures for Bank of Ireland, EBS and Irish Life & Permanent.
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arent they great – they will probably use the money to pay for more bonuses
Ordinary AIB workers haven’t gotten a bonus in years. Instead a new fleet of cars was bought for top execs :(
Agree with toast re the bonuses. And more money to change company cars for the managers and of course lend money to friends and family of directors
Lenihan would be raging if he saw this happening.
Don’t think it fair to say they have SAVED the taxpayer anything, it may have reduced what the final bill providing they do not look for more in another 6 months.
Only about 100 billion to go. U tools!!!
What the hell took them so long. Wankers
I’d like to see some transparency on this showing it reducing the overall bill, however little against however much. Right now its not worth the paper its written on as most citizens don’t beleive the banks or government.
@Sue. Unfortunately Lenihan spent the last 2 years transferring most of the bank debt that could be defaulted in to state debt. This was outside of the state guarantee, it means that when a new Govt. came in that what the banks could default on was now very small, it would now be defaulting on state debt. It’ll happen, they’ll call it restructuring or repositioning but a “Rose is but a Rose by any other name”.
Was this saving part of the plan – expected or is it a genuine reduction on what we will need to borrow?
If we stood together as a people & stopped bitching maybe something will change. Take to the streets of Dublin & demand that the banks get no more of our money. They don’t care about us because we let them do what they want.
have your say