A High Court order has confirmed that a legal challenge by one firm to AIB's plans to buy back its own subordinated debt will not affect other bondholders.
AIB last month announced plans to buy back its own subordinated debt at a discount of up to 90%. This is aimed at reducing the amount the State will have to inject into the bank to help it reach targets set by the Central Bank.
Today's order confirmed that a previous court order allowing the AIB move is now effective from April 22 in relation to 16 of the 18 subordinated debt instruments that were the subject of that order.
This confirms that the terms of these debt agreements can be changed. In the case of most of the bonds, the deadline for accepting AIB's offer is Monday.
Investment firm Aurelius Capital is currently involved in a legal challenge to the AIB buyback plan in relation to the other two debt instruments.
Order enables sale of Irish Life
The High Court has granted Finance Minister Michael Noonan an order which directs Irish Life & Permanent to sell off its Irish Life business.
The order was granted under Section 9 of the Credit Institutions (Stabilisation) Act 2010, which gives wide powers to the Minister to restructure the banking sector.
IL&P needs to raise €4 billion to meet financial targets set out by the Central Bank. As a result, it must sell its profitable Irish Life subsidiary, through either a stock market flotation of shares or a sale of the business to another company.
'The Direction Order was required to ensure that IL&P could make preparations to ensure that the Irish Life business will be offered for sale by October 31 2011 as part of the recapitalisation of IL&P, a spokesman for the group said.
