Norway’s sovereign wealth fund had a bunch of Irish bonds. Lots of private prospectors in Germany & Switzerland had lots too.

I’m not from a financial background; however…

It is likely that these bonds were bought on the open market at way below issue value. The markets view of us is constantly improving (pretty much – the price downturn in the last few weeks are not really a reflection on us) so anyone who bought bonds a while ago would have made a profit if they sold them on – but not off us.

They are also paying a very good interest rate on the price. Interest rate is paid calculated on the issue price. Say I sell a bond at €100 paying 5% (€5 per year). If market sentiment were to improve dramatically people would be willing to pay more for the bond, say €200. That bond is now paying 2.5%. If people were only willing to pay €50 for the bond it would now be paying 10%.

At the end of the day, it makes no difference to us as we have committed to pay the €5 every year until the bond matures.

If anyone took a loss, it was person who bought them when they were issued.

If Irish banks bought some on the market, this is a double-good thing as it means that Irish banks are making a healthy profit somewhere, thus meaning they are less likely to need further assistance from the State.

As regards this being a bitter pill, actually it is a very sweet pill because it means that people are buying our bonds on the open market – reducing the interest rate that people demand to hold them. This makes it more likely that we will be able to return to the market to sell our debt in 2013 (which is still fairly unlikely, at the moment – imo).

Ned, If some reportage is to be beleived one of the biggest investors in Irish Government Bonds over the last 12 months has been the Irish Banks. Basically they got cheap (1%) money from the ECB as part of the ECB’s flooding of the market with cheap money and have used this money to primarily buy up Irish Government Bonds. This has had the effect of driving the yield which is a measure of the interest rate payable on the face value of the bond (which does not change) as a percentage of the price of the bonds down. For example government had a bond issued in 2007 for say €100 with a 4% interest rate which means that €4 interest is paid every year on that bond. These bonds are traded all of the time on the markets at prices usually less than €100. So for example if this bond is traded for €40 then it still pays €4 interest so it is said to have a yeild of 10% i.e. €4 divided by €40. What the banks have done is buy loads of these bonds at rock bottom prices like in this example, the price of the bonds on the market has gone up to €60 because of demand. They still only pay €4 interest so the yeild is now 6.66% i.e. €4 divided by €60. The bank now has a choice, sell the bond into the current market and make €20 (a 50% profit on cost) or hold the bond to maturity when they assuming there is no bond holder burning they will get repaid €100 for something that they only paid €40 for plus they will have earned €4 per annum for the whole time they held the bond. The huge bank losses over the last few years have in part arisen due to the initial collapse in the value of the bonds of the likes of us and other countries but they are now being put in a position to earn it all back by this money flow from the ECB.

Dear Friend,
Well i do have my pension fund to consider !
Yours blah blah etc……….
Vote Edna, Vote YES

Explain? The banking problem was caused by event pre 2008, not after…

When Greece exits, the banks will be in a world of pain.

The Irish public took the banks medicine in 2008, not before.

You should be very clear that this is not capitalism. Capitalism would have let the banks fail.

Yep in a true free market the banks would just fail. And so would the entire free market with them because the banks are the backbone of the system. Not sure that’s a favourable scenario.

It would have been a challenge all right. I’m sure we’ll find out soon enough anyway.

I suppose the point is it doesn’t matter whether the results are favourable or not, it should have happened. Now politics is living a lie.

If that is the case Noel….why are the yields on Irish bonds at 7.5%? If they are such a good investment should the markets not be scrambling to buy them thus pushing the yields back?

Of course they want to invest, they’ll get their payout no matter what happens.

Well put John

Isn’t that what the men and women of 1916 were trying to do? A new start that’s what’s needed! 1916 Easter Rising Centenary Commemorative Coins in gold, silver and bronze finishes from 1916uprising.ie Well?

Am what? So are you implying that this story is fabricated or that for the last year the global market has been conspiring to ensure a YES vote in the referendum?. Delusion of the highest order. This is clearly good news.