And why this could well have been the best possible deal for Ireland.
________________________ Read more
Click for the feed from the Irish parliament, where legislators have until the morning to pass an emergency bill liquidating Anglo Irish’s resolution company, unlocking a promissory note deal which might be on its way, before creditors of Anglo hit the LITIGATE button. Or something. (The entire prom note deal is needed by the Irish government before the notes’ next circa €3bn interest payment, because that’s what they promised the public.) Read more
*NOONAN SAID TO PLAN ANGLO IRISH SPEECH IN PARLIAMENT
A few hours later… Read more
Chart du jour from the IMF staff’s Article IV report for Ireland — forecasting the path for Irish debt to GDP if a deal is reached with the ECB to reschedule those promissory notes, and if direct ESM equity replaced bank recaps under the bailout.
On this quiet, Olympics Friday — some bank bail-in reading, courtesy of a judgement by the High Court of England and Wales.
It’s come down surprisingly hard on a small, but very important, weapon in the armoury of bailing-in bank bondholders: exit consents. Read more
“We’ll avoid the accounting implications of this deal, though we think it might be an interesting study,” we said last week of Ireland’s circuitous non-deferral deferral of a €3.06bn cash payment to a dead bank under the infamous promissory notes.
Oops. Read more
We have an Irish promissory notes deal! A weird one.
This is not the deal to restructure the notes (used to reanimate the IBRC, the Anglo Irish after-life vehicle) overall. This is not a deal ‘with’ the ECB at all, technically. It’s in order to defer a €3.06bn cash payment that Ireland would have had to send to the bank at the end of this month. One plan was to swap out the cash for a long-term Irish government bond, achieving the deferral for, potentially, the bond’s lifetime. Read more
- Olli Rehn, noted scholar of Latin (‘pacts are binding’) Read more
The Irish government wants European authorities to share the cost of Ireland’s €63bn ($84bn) bank bail-out because “reckless lending” by international banks to Irish banks contributed to their collapse, the FT reports. Michael Noonan, Ireland’s finance minister, said Dublin had advanced proposals to the European authorities, which would enable Ireland to reduce its overall debt burden including one proposal that would see the government borrow money from the EFSF at low interest rates to pay off €31bn in promissory notes it issued for the recapitalisation of Anglo Irish Bank and Irish Nationwide Building Society. Read more
Ernst & Young faces a fresh threat to its reputation after an Irish accounting regulator said it would hold a disciplinary hearing to examine E&Y’s auditing of Anglo Irish Bank, a lender that had to be rescued by the Irish government in 2009, the FT reports. Already contesting a US lawsuit over its vetting of Lehman Brothers’ accounts, E&Y’s handling of the Anglo Irish audit has been challenged in three key areas by a special investigator hired by the Chartered Accountants Regulatory Board. The Irish arm of E&Y on Wednesday said it would defend itself vigorously, saying it “fundamentally disagrees” with the decision to initiate a formal disciplinary process. Read more
Yes, Anglo Irish and Irish Nationwide have been stitched together to make… the Irish Bank Resolution Corporation. It will take about a decade to ‘resolve’ them.
Although we’re sure readers can think of a better name. Keep it clean… Read more
A New York judge has handed Anglo Irish Bank a deadline of 5pm on Wednesday to argue why a US Federal court should not intervene in the Irish government’s attempts to reconstruct its banking system, reports the FT. The demand is in response to a legal challenge by Fir Tree Capital, a hedge fund holding $200m of subordinated debt, which may scupper Anglo Irish’s plans to sell a $10bn commercial property portfolio in the US. In a further sign of the complexities in winding up a financial institution funded in multiple countries and jurisdictions, the hedge fund is seeking an injunction related to covenants on debt issued by the Irish bank in New York. Paul Gardephe, the judge, has asked Anglo Irish in a court order to discuss whether it has submitted a plan to merge with Irish Nationwide Building Society, if it has sold substantial commercial assets in the US and “whether the ‘sale of all of its remaining US-based assets’ is ‘imminent’”. Read more
So Ireland has been busy threatening to throw senior bank debt investors under a bus. Again.
Earlier this week, Irish finance minister Michael Noonan announced plans to force “substantial” burdensharing for investors in the senior debt of Anglo Irish Bank and Irish Nationwide . As a reminder, senior debt investors have traditionally ranked above sub-debt and pari passu (the same) with depositors in a bankruptcy. Forcing losses on them has therefore been a very rare event. Read more
We’re unsure if this is exorcism, omen, or what.
According to the Irish Times: Read more
Dubliners out and about on Thursday, might notice that Anglo Irish has disappeared. The nationalised bank has removed signage from its offices ahead of a planned rebranding.
What with being dead and all, Anglo Irish will probably not have a starring role in Ireland’s fifth attempt at recapitalising banks, due at 4.30pm (Dublin time) this Thursday.
That would be a shame. Read more
Borrowing from the ECB’s emergency overnight facility has dropped from record highs — €15.1bn recently — to a more normal €1.24bn.
From an ECB release on Thursday morning: Read more
Even with Ireland’s Fine Gael party leading in the polls — the market is pricing in a one in three chance of senior bank debt investors taking a haircut.
Why? Read more
Ireland’s bank restructuring moved forward on Thursday after Dublin approved the transfer of deposits from Anglo Irish Bank and Irish Nationwide Building Society, the nationalised institutions most affected by the collapse of Ireland’s property market, reports the FT. Allied Irish Banks has bought €8.6bn ($11.9bn) worth of deposits from Anglo Irish for an undisclosed sum, while Irish Life & Permanent acquired the €4bn deposit book of Irish Nationwide. The deal improves the loan-to-deposit ratios of AIB and Irish Life – a key objective of the bank restructurings. The sales follow an auction run by the National Treasury Management Agency – the government’s national debt auction body – which indicated there had been some international interest. Read more
Fresh from the European Central Bank on Friday morning, some clues to the mystery of Thursday’s €15.8bn ‘fat finger’ tapping of eurozone liquidity.
Headlines off of Bloomberg: Read more
Investors in a distressed Irish bank are suing the company for merging with …
… another distressed Irish bank. Read more
A US hedge fund has asked a New York judge to intervene in the Irish government’s attempts to reconstruct its banking system as it seeks to recover funds, reports the FT. In a complaint filed in federal court, Fir Tree Capital is seeking to force Anglo Irish Bank to honour covenants attached to around $200m of debt held by the hedge fund. The bank, the lender most heavily exposed to Ireland’s property crash, was nationalised in 2009. It avoided bankruptcy and Dublin maintains it is a solvent commercial entity. The Fir Tree suit follows Dublin’s move last week to force Anglo Irish Bank to auction assets and prepare to merge with the Irish Nationwide Building Society under laws passed in December aimed at restructuring the banking system. Anglo Irish said last week it expects to report a record loss of €17.6bn ($23.8bn) for 2010. Read more
It has long been known that consulting firm Oliver Wyman crowned Anglo Irish the world’s best bank in 2006 — just when Anglo was actually… well, you know the story.
Sadly, the report that bestowed this fateful distinction has (quite unaccountably!) vanished from the Oliver Wyman corporate site. Read more
Eonia went a bit doolally at the end of January.
Many blamed a lack of front-loading in bank liquidity management as they watched Europe’s key overnight lending rate drift above one per cent for the first time since June 2009. Read more
Presenting Anglo Irish in 2006 (‘Managing for growth in a complex environment’):
Record funding growth… Read more
One of the most damning bits of Michael Lewis’ “When Irish eyes are crying” article concerns a zoology student, ‘business relationships’ and a missing Merrill Lynch note.
Here’s the extract via Barry Ritholtz over at Big Picture: Read more
Anglo Irish Bank has won vital support for a debt restructuring that could set a precedent for banks seeking to force creditors to share their financial pain, reports the FT. The bank announced that more than 90% of holders of two outstanding sets of subordinated bonds, due in 2014 and 2016, had agreed to participate in an exchange offer that would pay them at most 20% of the face value of their claims. The exchange is seen as a test case for bank debt restructurings as it offers less than market value for the bonds and uses a mechanism that forces dissenting minorities to accept. The scheme effectively wipes out bond holders who do not take up the offer. Read more
What on earth has been going on in Anglo Irish’s derivatives book?
Irish citizens might want to find out, now that they’re guaranteeing it. Read more
Older entries
1Time to take basic income seriously?
2We cannae give the economy no more, we're giv'n it all we've got Captain
3The case for official e-money +1
4Hacking and property prices make the BoE big league
5Tax needn't be taxing. It can also be a Hungarian debt wheeze
Show more6"Companies should know who really owns them..."
7On what really is different this time around
8The central bank (communications) bubble
9QE down under
10The end of the end of the end of the commodities supercycle is nigh, in Asia
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