Irish Times has reported that the Government has sold off its €1billion capital notes that it holds in Bank of Ireland
State sells €1 billion of BoI notes - The Irish Times - Wed, Jan 09, 2013
Is this another deal where the "Markets" have taken advantage?
The loan notes pay 10% annual interest. It is a pretty safe bet for a new investor knowing that if BoI got into trouble down the road that the Government woud step in to shore up the capital base. So in effect the markets have bought (in all but name) a government backed bond at 10%. Why would the government sell now when the markers are open for funding?