Ditching Anglo bond holders

[cd27]

Some moves in the right direction

Breaking the bonds that tie

"When last week Anglo Irish finally announced no payments would be made on €2bn of Tier 1 bonds, which are mostly perpetual in nature, there was barely a stir, although some brokers warned the government not to start "annoying liquidity providers", ie the bond market.

Of course, the government and Anglo Irish were able to hide behind the European Commission for making the decision to halt interest payments. A short release by Anglo said the European Commission was insisting that in order to get state funding it was only proper that junior-debt holders, who have no automatic security over the bank's assets, should not get paid.

Privately, the government was delighted the European Commission was going out front to ditch the junior bond holders, rather than them. What the government and Anglo did not say is that under the terms of perpetual bonds, Anglo is entitled to defer payments where it would cause the bank to breach capital rules layed down by Irish regulators.

But once again, in a clear illustration of how the government fears the bond traders, this perfectly legitimate get-out clause was not the one used. Instead, the government waited until the European Commission forced it to drop the holders of the junior bonds."

Sean Fitzpatrick loses heavily in all this apparently,

Anglo bond move costs FitzPatrick ?135,000 a year


Our government is so weak and cowardly tis unbelievable...

[cd27]

no comment on this, first bit of good news in a long time?

[hammer]

Hope he was using the interest to pay down his loans.

Is he paying interest on his loans ?

Seems like a good system. You borrow money from your employers and then lend that money back to your employers !!!! and you make money. Cool. I`ll try that next week.

[Simbo67]

Thanks for that CD27, its very interesting that they managed to offload some of the bonds but under the auspices of the Euro Commission. It seems as if the people inside the government are still too scared of the bond markets to actually pull the plug (or even alter the terms) for fear of a run away. Anyone with more detailed inside knowledge on this? This is an interesting thread (and topic) and it does seem to deserve debate.

[Libero]

Thanks for that CD27, its very interesting that they managed to offload some of the bonds but under the auspices of the Euro Commission. It seems as if the people inside the government are still too scared of the bond markets to actually pull the plug (or even alter the terms) for fear of a run away. Anyone with more detailed inside knowledge on this? This is an interesting thread (and topic) and it does seem to deserve debate.

It's worth remembering that "the people inside the government" have demonstrated to a very high level that they know f--k all about anything, especiallly matters of banking and finance.

When they counsel us against disappointing the bond markets, they speak with the same authority as the mythical groupthinkers who warned Columbus about sailing off the edge of the world.

[HanleyS]

How much of the guaranteed funds are forms other than deposits I wonder?

[cd27]

Yeah, I think Lenihan & co actually don't know what they're doing, have they no shame