Banking Sector Recapitalisation.

Dáil Éireann Debate, Wednesday - 3 February 2010

Wednesday, 3 February 2010

Questions (40)

Pat Rabbitte

Question:

104 Deputy Pat Rabbitte asked the Minister for Finance if and when he will convert the State’s preference shareholdings, through the National Pension Reserve Fund, in banks (details supplied) into ordinary equity; the effect this will have on the capital structures of the respective credit institutions; if the next coupon payment will be collected in the form of ordinary equity; if the preference shares are converted to ordinary equity in advance of the next coupon payment coming due, will a pro rata payment accrue to the NPRF in respect of the time for which the investment was held but no coupon was paid; if he will exercise the detachable warrants at the moment of conversion or if the NPRF will retain them; and if he will make a statement on the matter. [5339/10]

Written answers

Minister for Finance (Deputy Brian Lenihan)

There is no provision in the recapitalisation agreements for the conversion of the preference shares into ordinary shares. The bank can repurchase at par up to the fifth anniversary of the issue and thereafter at 125% of par. As I have indicated before, the Government is open to the possibility of further recapitalising the banks concerned, if this is required, and any conversion options would form part of that consideration.

With regard to the payment of the next coupon, my Department and the recapitalised banks are in continuing discussions with the Commission in respect of the banks' restructuring plans and this issue is a part of that discussion.