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Banks Recapitalisation

Dáil Éireann Debate, Thursday - 24 January 2013

Thursday, 24 January 2013

Questions (64)

Pearse Doherty

Question:

64. Deputy Pearse Doherty asked the Minister for Finance the value that a shareholding the €1 billion CCNs in Bank of Ireland earlier this month would have if they were realised as ordinary shares in the bank. [3480/13]

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Written answers

As announced by my Department last week the State was successful in disposing of its entire €1 billion holding of Contingent Capital Notes in Bank of Ireland. In the end, the book build process generated significant excess demand to enable the State to dispose of its entire holding in the CCNs at a price of 101% of their par value plus accrued interest. This generated a profit for the State of €10 million. Taking account of the coupon paid to the State last year, the taxpayer has earned a total return of over 15% in the space of 18 months.

As the Deputy will be aware the CCNs would only have converted to ordinary shares in BOI on the occurrence of a conversion event, i.e. a capital deficiency event (capital ratio less than 8.25%) or non-viability event. The CCNs were not convertible into ordinary stock at the option of the holder at any time, including when the State entered into the transaction.

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