Allied Irish Banks (AIB)

[mlkrborn]

Poor junior Bond holdres have to accept debt swap dictaed by the irish govt!
AIB expects €1.6 billion buyback boost

Updated: 17:15, Tuesday, 14 June 2011

AIB has said it expects its offer to buy back junior or subordinated debt to result in a gain of around €1.6 billion in capital for the bank.
1 of 1 AIB bond buyback - 86% acceptance so far
AIB bond buyback - 86% acceptance so far
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AIB's offer imposed losses of up to 90% on some bondholders and was aimed at reducing the amount the State will have to inject into the bank to help it reach Central Bank targets.

AIB said holders of more than 86% of the bonds eligible for the offer had opted to accept it.

Finance Minister Michael Noonan welcomed the announcement, describing the high take-up as 'encouraging'. He said most of the remaining amount related to a bond which was the subject of a legal challenge being taken against the AIB plan by one investment firm.

Yesterday, it emerged that some junior bondholders in AIB who will suffer significant losses will be able to claim under insurance.

The International Settlements and Derivatives Association decided that the losses on the bonds warranted a pay-out under the insurance measures known as credit default swaps (CDSs). It has been reported that the amount of the pay-out could be in the region of €300m.