FINANCE MINISTER Brian Lenihan hopes to publish the final expense of closing down Anglo Irish Bank on Friday, as it moves to try and ease the concerns of international investors who believe in increasing number that Ireland will bankrupt itself by trying to save the bank.
Bloomberg reports that the bank may possibly need up to €7bn in extra capital to oversee the winding down of the ‘recovery’ bank, citing two insiders who declined to be identified.
The confirmation that the Anglo price will be confirmed this week – as early in the ‘October’ window as possible – comes a day after the chief European economist of Goldman Sachs wrote that the government “needs to do something urgently to regain the love of the market.”
The Department of Finance has distanced itself from the report in yesterday’s Sunday Times which said that the government would seek talks with the holders of subordinated debt in Anglo Irish Bank, worth about €4bn, about how they may share the cost of the bank’s overall closure.
It also comes after another horrible day for the Irish government on the world’s bond markets, with the price of government borrowing once again hitting new records.
The price of 10-year bonds reached yet another all-time record, closing at 6.567% – equal to its previous all-time record – having earlier reached a new high of 6.597%.
The relative price of shorter-term borrowing saw more drastic jumps; the yield on two-year bonds jumped from 3.954% to an enormous 4.276%; the price of four-year borrowing, meanwhile, which had opened at 4.987%, peaked at 5.336% before closing just under 5.3% – a relative day-on-day increase of 5.3%.
Six-year bonds inflated by 3.7% to close at 5.854%, while eight-year bonds jumped to 6.283%.