Reuters : Time to abandon the Anglo Seniors?

breakingviews.com/bvTV.aspx

Irish Bank Bondholders must bear pain - Reuters correspondent

Dublin to launch fresh Anglo Irish bail-out → ft.com/cms/s/0/652d26c4-cb35 … ab49a.html

Ireland’s two- year blanket guarantee for bank liabilities at its six domestic lenders, introduced in September 2008 to prevent a run on Anglo Irish.
ORLY? Do tell more, would you like a drinkiepooh there minister? Now, about why you did it. Your friend Sean?

Perhaps Brian Cowen can let us know how wasting €30 billion serves to “build domestic confidence”.

Given the debt ranks senior to the shareholders (and yes I know it’s hopelessly insolvent) if we were to default on the bonds, would that give the bond holders additional rights in relation to the wind up of the bank. Wondering if repaying them is to stop outsiders access to the mucky information?

Ah Jaysus do ya not know that they couldnt explain that to mere mortals like ourselves as it might cause us to learn something we shouldnt know FFS. :wink:

Ahh ye need the “real” My friend John!

“I think you got yourself a deal!”

Spot on I reckon

+1
If it is not about information, it is about repayment. Stiffing the bondholders would require a liquidation with bondholders and depositors getting their share (pari passu and all that). Subordinates would then get the scraps. The remaining loans would be liquidated which would result in either a sale or a gift of them to the bondholders. Either way, the liquidator would end up in possession of the information of the loans and they would become ‘public’ knowledge.

We are back to how many ‘people’ (the great and the good and their political lackeys) would be stuffed by this.

But why is there no leakage of info to this point? Is our society so used to corruption that no one will even leak this stuff to a journo who could at least hint at whose involved leading to public outcry and investigation?

If you gave depositors ample warning, they could withdraw their money. Bondholders have to wait for redemption dates. So depositors may rank equally with snr bonds in liquidation, but they don’t rank equally before liquidation :wink:

If there were murky loans, there’s every chance that they’ve already been written off.

I like the idea - liquidation by the public…

But don’t you think that a liquidator appointed by the bondholders would trawl back through looking for fraudulent preference or whatever it’s called?

I don’t know. If loans were changed to non-recourse (anglo 10-style), could liquidators do anything? Equally, loan files and documents could have been lost.

I’d expect liquidators would only be interested in cases where it looked like they could recover money. I’m sure a compliant banker would know how to ensure a write-off that couldn’t be subsequently pursued.