Anglo Irish Bank has announced that it is offering to issue new bonds to subordinated bondholders at 20% of the original value of the bonds.
The three sets of subordinated bonds - due to expire in 2014, 2016 and 2017 - had an original value of just under €1.6 billion. This means bondholders who accept the offer will receive new Government-guaranteed bonds worth around €300m.
But the bank is also making arrangements to ensure that those who do not take up the offer will be paid only one cent for every €1,000 owed. The move is aimed at improving the bank's capital position.
Subordinated bondholders generally lend money for a higher interest rate, but in return face a greater risk of not being re-paid. Last month, Finance Minister Brian Lenihan it was right that such bondholders should share the costs of rescuing Anglo Irish Bank, and that legislation to enable this was being worked on.
In today's statement, Anglo Irish Bank drew the attention of holders to the Minister's remarks, adding that its offer reflected the current 'distressed trading levels' of its subordinated debt.
The bank also announced plans to pay only one cent for every €1,000 to holders of other higher-risk, or undated, subordinated debt. Bondholders who take up this offer will also be paid a 'consent fee' of €50 per €1,000.
Drumm home transfer to be set aside
The wife of former Anglo Irish Bank chief executive David Drumm has agreed to the setting aside of the transfer of their former home in Malahide into her sole name.
Lawyers for Lorraine Drumm told the Commercial Court there had been talks between Mrs Drumm's legal team and lawyers for Anglo Irish Bank since Tuesday.
On Tuesday the Court granted an injunction stopping Mrs Drumm from transferring half the house back into her husband's name after being told this was an attempt to put it beyond the reach of his creditors.
Senior Counsel Gary McCarthy, for Lorraine Drumm, said today there was never any intention by Mrs Drumm to do anything but undo the transfer into her name, registered in May last year.
That transfer had been challenged by Anglo Irish Bank, which had claimed it was an attempt to defraud creditors. Mrs Drumm is now consenting to the setting aside of that transfer as if it never happened.
But the court cannot yet make a formal order, ordering the set aside, because of the position of Mr Drumm. He filed for bankruptcy in the US last week and the US trustee in bankruptcy has not appeared before the Irish courts yet to inform them about her attitude to the legal proceedings.
List of Drumm creditors emerges
Documents from the US Bankruptcy Court in Massachusetts show that there will be a meeting of creditors of former Anglo Irish Bank chief executive David Drumm on November 16 in Boston.
The papers show a list of creditors which includes Anglo Irish Bank's offices in Dublin and Boston, AIB Visa Card, Cape Cod Five Cents Savings Bank, Chase Visa, Citicards Exxon Mobile, GE Money and Citizens Automobile Finance.
Other creditors listed are Dublin's KBC Homeloans, solicitors Eversheds O'Donnell Sweeney and Pender Public Relations. A number of family members are also listed. They are Mary and Susan Drumm, both with addresses in Skerries, Co Dublin.
The documents say David Drumm has an interest in property in Ireland and Massachusetts. They say Mr Drumm transferred his interest in property in Ireland to his wife 'for less than fair consideration'. Anglo has secured an order restraining any further transfer of property.
Anglo Irish Bank subordinated debt offer
Anglo Irish Bank has announced that it is offering to issue new bonds to subordinated bondholders at 20% of the original value of the bonds.
The three sets of subordinated bonds - due to expire in 2014, 2016 and 2017 - had an original value of just under €1.6 billion. This means bondholders who accept the offer will receive new Government-guaranteed bonds worth around €300m.
But the bank is also making arrangements to ensure that those who do not take up the offer will be paid only one cent for every €1,000 owed. The move is aimed at improving the bank's capital position.
Subordinated bondholders generally lend money for a higher interest rate, but in return face a greater risk of not being re-paid. Last month, Finance Minister Brian Lenihan it was right that such bondholders should share the costs of rescuing Anglo Irish Bank, and that legislation to enable this was being worked on.
In today's statement, Anglo Irish Bank drew the attention of holders to the Minister's remarks, adding that its offer reflected the current 'distressed trading levels' of its subordinated debt.
The bank also announced plans to pay only one cent for every €1,000 to holders of other higher-risk, or undated, subordinated debt. Bondholders who take up this offer will also be paid a 'consent fee' of €50 per €1,000.
