Irish Nationwide has announced plans to buy back of £146m (€172m) of subordinated debt at an 80% discount. This is a slight premium to its current market price.

The Irish Government last year said it expected subordinated debt holders in nationalised Irish Nationwide and Anglo Irish Bank to make a contribution after the state spent billions of euro bailing out the two institutions.

The offer applies to £126m of bonds due in 2016 and £20m worth of 2018 notes, Irish Nationwide said in a statement. Bondholders who do not accept the offer by March 18 will be offered a nominal payment of 0.001% of the bonds' face value.

Anglo Irish Bank made a similar offer to some of its subordinated bond holders last year.

Last week, the High Court ordered that Irish Nationwide's deposits be transferred to Irish Life & Permanent, while Anglo Irish Bank's deposits went to AIB. The direction order was made at the request of the Minster for Finance.