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 Post subject: Re: Minister says some bondholders will have to share [...]
PostPosted: Fri Nov 26, 2010 11:46 am 
Looking good.

http://www.irishtimes.com/newspaper/frontpage/2010/1126/1224284184012.html

Quote:
Several proposals are on the table, said a source. At present attention centres on two similar schemes. In the first, bank debt would be converted into equity shares. In the second, bond investors would be given the choice of injecting fresh capital into banks or face a cut in their investment.

The source said there was a “common understanding” between delegations from the EU Commission, the European Central Bank and the IMF that senior and junior bondholders should each pay a share of the rescue costs

The first step would be to seek to “persuade” senior bondholders to participate in the bailout, said the source. “If that doesn’t succeed, the question is how can you force them in a legally-sound way.”




The bad.

http://ftalphaville.ft.com/blog/2010/11/26/417166/setting-sights-on-senior-irish-bank-investors/

Quote:
… This [news] sets a nasty, if situationally understandable, precedent which highlights two other points about the current situation: i) the constant “goal post moving” in terms of regulation, which does enormous damage to investor and entrepreneurial confidence, and ii) that for all that governments have used their balance sheets (budgets) to shore up financial sector balance sheets, the liabilities that this creates will over the short or the long run be passed back to the financial sector and the general public. At some stage govt bond markets in the G7 will suffer the consequences of this via a sharp rise in yields.



The Ugly.

The Irish banks and Gov won't be tapping the markets for awhile.
Back to oldskool lending practices.
Deposits=Loans

Want a Mortgage?
Yep.

Where's your Deposit?
Bank of Bermuda/Gold Florins

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 Post subject: Re: Minister says some bondholders will have to share [...]
PostPosted: Fri Nov 26, 2010 11:53 am 
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10 year Yield over 9.15%
http://www.bloomberg.com/apps/quote?ticker=GIGB10YR:IND

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 Post subject: Re: Minister says some bondholders will have to share [...]
PostPosted: Fri Nov 26, 2010 1:26 pm 
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Neo Landlord

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How much bondholder debt is left and how much has been redeemed already?


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 Post subject: Re: Minister says some bondholders will have to share [...]
PostPosted: Fri Nov 26, 2010 1:52 pm 
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In the absnce of QE this was inevitable. This is the best news we have heard for a while.


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 Post subject: Re: Minister says some bondholders will have to share [...]
PostPosted: Fri Nov 26, 2010 1:58 pm 
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Too Big to Fail
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I think the "Good" above outweighs the "Bad" and the "Ugly" by a considerable distance. Assuming it works. In fact I don't really understand the FT's "Bads": that the markets don't like uncertainty and the bills will eventually be passed back to the public anyway? Meh to the first one and on the second, fine, but at least the public don't bear it all, at least it's spread over the long term and at least there is a possibility that a global recovery will get things back to normal rather than permanently skewing yields upwards.

So now all we have to worry about is our existing €100b National Debt, the €40b that will be added to that by the end of the 4-year plan, whatever our rump contribution to the bank bailout is and, you know, whatever events throw at us. I still don't think we can pay all that back, but at least it's not €300b. Might well be half that though.


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 Post subject: Re: Minister says some bondholders will have to share [...]
PostPosted: Fri Nov 26, 2010 4:22 pm 
Larry wrote:
I think the "Good" above outweighs the "Bad" and the "Ugly" by a considerable distance.



+1. The Budget is a sideshow, the backroom deal on the banks is the main event.
IMF,EU, Irish Banks, Gov, Banks/Gov advisors, Dept of finance, Central Bank/Regulator, Legals.
The mind boggles at what is going to come out.
Hopefully Haircut 100. :wink:


Larry wrote:
I still don't think we can pay all that back


:cry:


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 Post subject: Re: Minister says some bondholders will have to share [...]
PostPosted: Fri Nov 26, 2010 4:34 pm 
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European Union and International Monetary Fund officials are taking legal advice on how senior bondholders can share the cost of Ireland’s €85bn bailout without triggering lawsuits, according to reports today.

http://www.independent.ie/business/iris ... 37617.html

AND

Officials in the EU-IMF mission to Dublin are examining how senior bondholders could be compelled to pay some of the cost of rescuing Ireland’s banks.

http://www.irishtimes.com/newspaper/bre ... king6.html

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 Post subject: Re: Minister says some bondholders will have to share [...]
PostPosted: Fri Nov 26, 2010 4:37 pm 
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clairec wrote:
How much bondholder debt is left and how much has been redeemed already?


AIB has about €5.9 billion of senior unsecured debt and €12.1 billion of senior secured notes,
Bank of Ireland has €5.4 billion of senior unsecured debt and another €5.9 billion of Government- guaranteed bonds

From this article - http://www.irishtimes.com/newspaper/bre ... king6.html

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 Post subject: Re: Minister says some bondholders will have to share [...]
PostPosted: Fri Nov 26, 2010 5:28 pm 
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Didn't Lenihan or Cowen say last week that senior bondholders are equivalent, on a technical basis, to depositors?

If that's the case how can you burn bondholders without exposing depositors? Brendan Burgess notwithstanding of course.


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 Post subject: Re: Minister says some bondholders will have to share [...]
PostPosted: Fri Nov 26, 2010 5:52 pm 
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You don't. You burn both equally and then compensate the depositors under the deposit guarantee. Works a treat in the US under FDIC and would have worked equally well here if some muppet hadn't guaranteed the bondholders also.


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 Post subject: Re: Minister says some bondholders will have to share [...]
PostPosted: Fri Nov 26, 2010 8:48 pm 
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this is what Merkel told him to do 2 weeks abo but she was told to mind her own business. This is also the answer suggested by that those who talk most sense on vincent brown. The irish government stubbornly do what is asked of them, stall and call it a game of poker. Now they try to make it look like it was their idea and they got us out of a hole.

Also, I heard Peter Matthews say 30 billion paid to bondholders a week or two ago. Done and dusted.

Lenihan criticises negative rte claiming we all partied:



as Brian Lucey said, why does lenny not debate in front of a panel sometime.

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 Post subject: Re: Minister says some bondholders will have to share [...]
PostPosted: Sat Nov 27, 2010 12:17 pm 
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FT Front page
Quote:
Banks hit by Irish bonds concern


European bank shares fell sharply amid growing speculation that even the highest-ranked bondholders in Irish banks could be forced to accept losses, leading to contagion throughout the financial system.

Royal Bank of Scotland and Lloyds Banking Group, the two UK lenders with the highest exposure to Ireland, fell 5.3 per cent and 4.4 per cent, respectively, on Friday. Santander, Spain’s leading bank, fell 3.7 per cent while KBC, the Belgian bank that has an Irish arm, slid 3.3 per cent


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 Post subject: Re: Minister says some bondholders will have to share [...]
PostPosted: Mon Nov 29, 2010 10:57 am 
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Slightly off topic but following Guido's list of bondholders, this blogger did some digging and throws some light on the phantom bondholders. Of course the notorious vampire squid, Goldman Sachs (which has Peter Sunderland batting for it in Ireland) is included. Enough said. To not default is condoning the immoral behaviour of the banks.

"So where do these wealthy bond holders live and work?
Germany has the most with 15 of the bond holders. Who between them hold 5.3 trillion euros.
France is next with 10 bond holders. Who have about 4 trillion to keep them warm.
Britain is third with 9 who have around 3 trillion.
The Swiss have 6 but who have about 8.5 trillion.
America has only three and hold only a trillion.
Other nations include, Spain, Belgium, Portugal, Holland Finland, Norway, Sweden, Poland, South Africa and Italy.
All these figures are very rough. The figure for Switzerland is certainly under because Private Swiss banks just don't publish figures. What we can say for sure, figures or no figures, is these are not banks investing widow's pensions or orphan's pennies.
So who are they? Well many of the bond holders are privately held banks, which list their activities as asset management for off-shore, non-resident and high value individuals. To give you an example, one of the private banks is EFG Bank of Luxembourg. EFG stands for European Financial Group which is the third largest private bank group in Switzerland. It manages over €7.5 trillion in assets. It is 'mostly', 40%, owned by Mr Spiro Latsis, son of a Greek shipping magnate. He also owns 30% of Hellenic Petroleum. His personal fortune is estimated to be about $9 Billion.
Now there is absolutely no suggestion that Mr Latsis has ever done anything wrong or illegal. And his holdings are, I am quite sure, perfectly legal and above board. But when we talk of Anglo Irish's bond holders it is Mr Latsis and those with his sort of wealth who we are talking about NOT widows and orphans or you and me. It is therefore worth remembering, the next time an Irish politician, or any of our politicians for that matter, say that some welfare payment can no longer be afforded, it is because the money that could have paid for it has been given to the bond holders, people not unlike Mr Latsis, instead. The Irish people are paying and protecting the interests of people like Mr Latsis over the interests of their own children. And it is their own politicians who are doing this.
Other bond holders call themselves 'asset management' firms. The fifth largest asset management firm in the world is one of the bond holders. Others are insurance companies. The 6th and 9th largest in the world, to be specific. Others are the largest banks, Deutsche, Soc Gen, Barclay's, PNB Paribas, Unicredit (who don't appear on the list but own Pioneer Investments),and Wells Fargo (also not on the list but who own European Credit Management). Then there is Goldman. No show without the squid.
Kleinwort Benson Investors is a bond holder. But Kleinwort is owned by a Belgian holding company, RHJ which is part owned by Mr Timothy Collins. Mr Collins also sits on the board of Citigroup. So he too is one of the bond holders the Irish people are 'helping'.
Finally, a very large number of the banks who are Anglo Irish's bond holders, are members of something called the Euro Banking Association. All the large European, most of the large US banks, Swiss, Japanese, Nordic and some Chinese are members. The chairperson is Mr Hansjorg Nymphius of Deutsche Bank. Other board members are from JP Morgan Chase, RBS, Bank of Ireland, West LB(bankrupt), BNP Paribas, ABN Ambro, Dexia and Banco Santander.
Its a list which could double as the list of Anglo Irish's bond holders. The EBA was set up in Paris in 1985, since when it has been and is, central to promoting European Union financial integration and the area's banking interests. The EBA has close ties to the ECB.
I will leave you to digest this disgusting bolus of self serving wealth protection. "

Golem XIV - Thoughts: Who are the bond holders we are bailing out?


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