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Thread: Haircutting or resolution of bank subordinated debt

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    Default Haircutting or resolution of bank subordinated debt

    Anglo offers to buy back $4.6bn debt - The Irish Times - Wed, Jul 22, 2009






    Nationalised lender Anglo Irish Bank said today it wants to buy back $4.6 billion of subordinated debt as it seeks to boost capital.
    The bank has offered bondholders between 27 per cent and 55 per cent of face value to redeem tier 1 and tier 2 securities.
    Anglo Irish, which is grappling with a surge in loan losses, said July 9th it may halt interest payments on some Tier 1 securities as part of conditions set by the European Commission when it approved a €3 billion capital injection by the government.
    The bank, which reported a first-half loss of €3.77 billion, said in May it faces writedowns of €7.5 billion on loans in the three years through September 2011.


    Bloomberg
    All these numbers!!! What does it all mean?!! Where will it all end?!!
    “A healthy social life is found only, when in the mirror of each soul the whole community finds its reflection, and when in the whole community the virtue of each one is living” R. Steiner

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    Politics.ie Member jpc's Avatar
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    And these tulips want 75- 80% of the face value of their bad debts?
    Dream on.
    Its only a chat, we ain't the world council.

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    When is this debt due? It seems Subordinated debt is low level/ranked debt so why are Anglo doing what appears a generous deal on that? It seems it Anglo was closed they were be due more or lss nothing.


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    Politics.ie Member cyberianpan's Avatar
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    This is a big story as it is recovery of a few billion for the country

    The negotiations should be interesting

    cYp
    "Yawn , am I alive yet ?"

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    Politics.ie Member powderfinger's Avatar
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    Who would be typical holders of this type of debt?

    Would they be overseas or Irish based?

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    Politics.ie Member cyberianpan's Avatar
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    Quote Originally Posted by powderfinger View Post
    Who would be typical holders of this type of debt?

    Would they be overseas or Irish based?
    A lot of Germans that I understand

    cYp
    "Yawn , am I alive yet ?"

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    Politics.ie Member powderfinger's Avatar
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    Quote Originally Posted by cyberianpan View Post
    A lot of Germans that I understand

    cYp
    Thanks for that CyP.

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    So in other words, Anglo Irish Bank pays back a little of the money it borrowed to stay afloat.

    Woudnt it be great if we could all get the government to pay off our loans, and then we pay a small amount back to the government.

    What I donr understand is how they have managed to make 4.5 Billion already?

    If they could make that much money in such a short space of time, why were they ever in trouble?

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    Not being an economist, I'm still trying to get my head around this one, after a busy afternoon. Any care to disambiguify me ?

    "buying back" debt - does the bank is repaying money it owes to others, or what?

    Explanations welcome...
    “A healthy social life is found only, when in the mirror of each soul the whole community finds its reflection, and when in the whole community the virtue of each one is living” R. Steiner

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    Politics.ie Member cyberianpan's Avatar
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    Quote Originally Posted by yehbut_nobut View Post
    Not being an economist, I'm still trying to get my head around this one, after a busy afternoon. Any care to disambiguify me ?

    "buying back" debt - does the bank is repaying money it owes to others, or what?

    Explanations welcome...
    You can always buy back you debt (pay it off). The significant thing here is they're only gonna pay back some of it and then call it quits !!

    27 per cent and 55 per cent of face value
    cYp
    "Yawn , am I alive yet ?"

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