Some junior bondholders in AIB who will suffer significant losses as a result of the Government's burden-sharing plan will be able to claim under insurance.

The International Settlements and Derivatives Association has decided that the losses on the bonds warrant 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.

A spokesperson for the Department of Finance said the development did not represent a default by AIB and was 'entirely anticipated'. Anglo Irish bondholders also benefited from similar pay-outs in some cases.

A department spokesperson also said the news had no impications for the State nor AIB, as the bank was not a party to the CDS contracts. The department said the ruling had no effect on deposits in AIB or any other guarantees institution.

The ISDA said that the 'credit event' had happened on June 9 when AIB suspended interest payments and extended the maturities of most of its outstanding junior debt ahead of a buyback that will inflict losses of up to 90% on investors.

Analysts say AIB was expected to generate around €2 billion from imposing losses on the junior bondholders. A New York-based investor is, however, challenging the move.

Investors in 15 of the 18 subordinated securities earmarked for the discounted buyback had until midnight New York time this evening to take up the offer or risk their investment being effectively wiped out.