Anglo Irish Bank currently has €2.35 billion of subordinated debt, made up of €600 million in Tier 1 debt, €43 million in Upper Tier 2 debt, and €1.7 billion in Lower Tier 2 debt.
As the Deputy will be aware, Anglo recently undertook a debt buy back exercise, which crystallised losses for bondholders, who received payments significantly less than the face value of the bonds they held, and which generated a €1.6 billion profit for the bank. The undertaking of a future liability management exercise is a matter for consideration in the first instance by the Board of the bank on a commercial basis, taking into account the overall funding and capital implications of such an exercise for the bank.
Anglo's subordinated debt is publicly traded and is dealt through clearing house systems. As an issuer, Anglo does not have access to the records of those clearing systems, and does not have a means of establishing the underlying ownership of its subordinated bonds at any given time. Unlike in the case of shares, the holders of listed debt instruments are not subject under company law to a disclosure regime.
Anglo is aware that its former chairman, Sean Fitzpatrick, purchased a beneficial interest in certain debt instruments of the Bank during 2008, at which time the price of the debt instruments involved was higher than that paid under the bank's recent debt buy back exercise. A specific disclosure on this holding was made in note 50 of Anglo's annual accounts for 30 September 2008.
Dated subordinated debt issued on or after the commencement date of the new draft Eligible Liabilities Guarantee (ELG) Scheme will not be guaranteed either under the ELG Scheme or under the current Credit Institutions Financial Support (CIFS) Scheme. However, dated subordinated debt already guaranteed under the CIFS Scheme will remain guaranteed under the CIFS Scheme due to the irrevocable nature of the CIFS guarantee.