Tuesday, 2 July 2013

Questions (247)

Michael McGrath

Question:

247. Deputy Michael McGrath asked the Minister for Finance the losses imposed on subordinated bondholders in covered institutions from liability management exercises in each year since 2008; the number of legal actions currently under way against the State in respect of these actions; and if he will make a statement on the matter. [31963/13]

View answer

Written answers (Question to Finance)

The following table details the liability management exercises.

Liability Management Exercises

-

2008

2009

2010

2011

2012

-

€m

€m

€m

€m

€m

Total Subordinated 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

N/a

Nominal Value

102

2,784

1,890

174

N/a

Average Discount

29.4%

67.8%

84.1%

80.5%

N/a

*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.

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.

Since this Government came to into power, we reduced the cash required from the State by €5.8bn, from burden-sharing with subordinated bondholders. The contribution from burden-sharing with bondholders amounts to approximately €15bn since the banking crisis began.

There are currently no legal actions under way against the State in respect of these actions.