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Bank Guarantee Scheme Losses

Dáil Éireann Debate, Thursday - 17 January 2013

Thursday, 17 January 2013

Questions (59, 60)

Dessie Ellis

Question:

59. Deputy Dessie Ellis asked the Minister for Finance the process undertaken to redeem subordinated and junior bonds at the covered institutions (details supplied); and specifically the way the haircut offers were derived. [1786/13]

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Aengus Ó Snodaigh

Question:

60. Deputy Aengus Ó Snodaigh asked the Minister for Finance if he will set out in tabular form by year for 2008, 2009, 2010, 2011 and 2012 for each of the covered institutions (details supplied), the total subordinated and junior bonds repaid including the nominal value of the bonds, the sums actually paid and the haircut representing the difference between the two. [1785/13]

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Written answers

I propose to take Questions Nos. 59 and 60 together.

-

2008

2009

2010

2011

2012

-

€m

€m

€m

€m

€m

Total Subordinated and Junior Bonds:

BoI(1)

Consideration2

600

700*

3,300*

800*

N/a

Nominal Value

600

1,700

4,700

2,300

N/a

Average Discount

0%

59%

30%

65%

N/a

AIB (incl EBS)

Consideration

200

1,366

1,842

1,052

N/a

Nominal Value

200

2,470

2,377

4,882

N/a

Average Discount

0%

34.97%

37.80%

72.58%

N/a

Permanent TSB

Consideration

162

N/a

N/a

455*

N/a

Nominal Value

162

N/a

N/a

1,459

N/a

Average Discount

0%

N/a

N/a

69%

N/a

IBRC (incl INBS)3

Ended 30 Sep 2008

Ended 31 Dec 2009

Ended 31 Dec 2010

Ended 31 Dec 2011

Ended 31 Dec 2012

Consideration

72

895

301

34

(119)4

Nominal Value

102

2,784

1,890

174

(119)

Average Discount

29.4%

67.8%

84.1%

80.5%

0%

*Includes amounts redeemed at par

1) BOI figures are rounded to their nearest hundred million.

2) Consideration provided as part of the Liability Management Exercises was in the form of cash, equity and other debt instruments.

3) Foreign exchange rates are as at end financial period.

4) On 27 July 2012, the English High Court delivered a judgement granting declaratory relief against IBRC in favour of Assénagon. The effect of the Assénagon judgement is that the redemption of certain dated notes by the Bank during November and December 2010 was invalid and consequently these notes therefore continue in existence on their original terms. The Bank continues to honour quarterly coupon obligations in respect of the notes pending the outcome of the Appeal.

The purpose of the Liability Management Exercise (LME) transactions was to create additional core tier 1 capital and to strengthen the quality of the capital base of the Banks. I understand that these transactions were commercial decisions for the Institutions following consultation with their financial advisors.

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