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Posts tagged ‘Bonds’

Irish bank debt negotiations going nowhere

Enda Kenny

Enda Kenny (Photo credit: Wikipedia)

We have become used to broken promises in this financial crisis. Remember Enda Kenny in December 2010 after the Greens had pulled the plug on the previous administration and political parties were on an election footing. Remember “Mr Kenny said there is no question of defaulting on sovereign debt or on senior bank bonds that are covered by the Guarantee but he believes that the taxpayer can save between €12-17bn by negotiating a sharing of losses with the unguaranteed senior bondholders”. Of course that promise became more nuanced in the subsequent manifesto a month later but no-one ever disabused us of the notion that this government would pursue to success a significant write-down on the remaining senior bondholder debt. And in June this year, Enda emerged from the all-nighter of the EU summit to tell us that some people had just found out he was not someone to be tangled……………………

full article at source:http://namawinelake.wordpress.com/2012/09/10/irish-bank-debt-negotiations-going-nowhere/

€12m Anglo senior unsecured unguaranteed bond paid in full today

That’s more than the cost of the Jobs Initiative for one week.

By namawinelake

The cost of Minister Noonan’s inaction on Anglo Irish Bank (“Anglo”) and Irish Nationwide Building Society (INBS) is highlighted today as Anglo repays a €12m senior unsecured unguaranteed bond at par, that is without any haircut or discount. The bonds (ISIN ref: XS0306086157, SEDOL ref: B1ZBPV0) were issued in June 2007 – Sinn Fein finance spokesperson Pearse Doherty yesterday described the bonds as “unguaranteed unsecured” and there is no reason to doubt him. Historical prices appear to be unavailable at the Irish Stock Exchange this morning, but last month Anglo redeemed senior bonds which yielded 30% annualized returns to investors who had bought last December 2010. Our recently announced Jobs Initiative costs €470m per annum, so in a single transaction today we are spending more than the proceeds of one week’s raid on private pensions.

full article at source here : http://wp.me/pNlCf-1yL


This amount could have paid the dole for one year to 1200 of the over 2900
people who now find themselves on the dole since the last numbers came out .Mr Noonan’s
incompetence is fast catching up with his predecessors levels and that was grim
to say the least.

Losing money and paying money men is the order of the day closing
down hospitals and essential health services is seems to be the way forward for
this Minster

Michael Noonan Spin and more spin !

Finance Minster, Michael Noonan before he got into
government said that the bail bailout was a bad deal for Ireland.”It’s been
priced too high”. The money that was been borrowed was been borrowed at 2.8%
and we’re paying 5.8%.

“3% of an add-on handling charge is extravagant and the
previous government should not have agreed to those conditions”. Mr Noonan they and you should not have
agreed to this obvious rip-off of the Irish taxpayers .The fact remains that
these debts are private debts that the private banks operating in this state
are fully responsible for these debts, you and the previous government did not
have the right to foist this odious debt on to the shoulders of the people of
Ireland .It is not a case of the interest is too high or the conditions are too
harsh it is simply a case of fraud.

Mr. Noonan and his band of overpaid political leaches are no
better that the international bondholders he seem to be bending over backwards
to reimburse by stealing the resources of our country. Plunging the nation into
a state of permanent financial slavery of its citizens is not going to help
anybody except his pals in Europe .Burden sharing with the unguaranteed senior
bondholders is just a side show and a blatant attempt by Mr. Noonan to position
himself and his government into a better light in view that his policy seems to
be “sit and watch” and let Europe make all the decisions he and the government
will then implement on their behalf.

The answer is simple the bondholders have given all this
money to the banks and they are now the legal owners of these banks, so these
banks should be handed over to the bondholders (All of them)

A debt for equity swap .they lent to the banks on the
strength of the banks collateral ,there was no guarantee given to these
bondholders that the Irish state would back up these loans in case of a bank
default .

The people of Ireland have been rightly screwed and they seemed
to be content with this situation if the latest polls are to be believed. It is
a s if the media are oblivious to the scale of fraud that is been perpetrated on
the Irish nation because every time a politician comes on to our TV screens
they do not get grilled on the real issues, there is no serious grilling of
these masters of spin about previous promises to the nation. The media and their
pampered talentless overpaid personalities are part of the status quo .

This is the time for us to play hardball with the ECB and the Bondholders

At least the Greeks are now been honest and they realize that they cannot continue rewarding bondholders and the corrupt practices of the ECB by taking on Austerity measures that are hurting its own people .As I have saying all along the bondholders that have made irrational business decisions must take the pain they are due for having made these disastrous decisions in the first place and the attempt to force these gambling debts on the taxpayers is not going to work

We here in Ireland are in the same boat and we will be the next in line we should now join Greece and force the ECB to face the fact we cannot pay back these private debts of mostly German banks.

If we don t take this opportunity now we will end up losing all of the funds we have in the pension fund and then we will have to default in any case. Our politicians are a bunch of whims and have no Balls we need guys that are able to play hardball right now and get better terms for the people of Ireland .Failing that we are heading for the door and leaving the Euro with Greece and maybe Portugal  .Only in our case we will be pushed out !

Citibank email sparks rumours of Greek default over Easter weekend

By Namawinelake

 It’s “devoid of any substance and verge on the ridiculous” according to the Greek finance ministry but as Greek 10-year bonds touch even greater highs this afternoon – presently trading at 14.9% mid-point – it seems that something may be afoot in bond markets. The claim is that a Citibank employee was responsible for an email which speculated that Greek authorities might seek to implement a restructure/default/burden-share scheme over the Easter holiday weekend.
Meanwhile, Ireland’s 10-year bond has reversed all the gains since the announcement of the stress test results on 31st March, 2011 and are presently trading at a record 10.28% mid-point compared with a previous record closing of 10.22% just before the announcement of the stress test results and details of the bank restructuring. Portugal’s 10-year bond is also in record territory trading at 9.5% mid-point. If there is any cheer it is thatSpain’s 10-year bond has eased back today to below 5.5%. It is still a mystery on here as to howSpain’s banks are so healthy and their property sector so relatively unscathed by the financial crisis and construction and housing bubble.
The concern is thatGreecewill default and thatIrelandwill follow closely on her heels. And if a default is inevitable forIrelandthere are actions that can be undertaken now to try to make the default as orderly and inexpensive as possible. Dealing robustly with bondholders (senior and subordinated) would fall into that category of discussion.

full article source: http://namawinelake.wordpress.com/2011/04/21/citibank-email-sparks-rumours-of-greek-default-over-easter-weekend/

Bondholders must be “Hedged” so why are we still expected to pay them out in Full??


I was on East CoastRadio  this morning  and I revealed that any bondholders worth his salt  must have had insurance against any loss on their positions (they must have been hedged”)

here is a video on one such hedging tools and there are many one can take out on any number of assets or positions

So why are the main political parties still insisting in bailing them out to the full value of their positions when in fact they are covered for potential  losses and if they haven’t taken out hedging then the Politicians want to still pay someone that has no insurance on his car or house so to speak !

This is just stupid and sheer madness.

Message to the voters of Wicklow the bondholders are covered and we do not need to bail them out, default now .

What’s new?

What’s new? 

This week it emerged more than half of the bondholders – whom it is often said should be burned by Ireland – may be located in Ireland.

What are senior and junior bondholders? 

Senior bank bonds and second-class bonds are two forms of interest-bearing debts issued by a bank. Second-class bonds are also known as sub-ordinated bonds because the rights of the bondholder are sub-ordinate to those of the senior bondholder.

Sub-ordinated bonds pay a higher annual interest rate but are a riskier investment and owners must bear losses sooner than senior bondholders. Senior bonds pay a lower interest rate but are safer, as the legal protection against default is tighter.

Sub-ordinated bondholders in Anglo Irish Bank, Allied Irish Banks and Bank of Ireland have already borne losses. Senior bondholders have not. They have been supported at the expense of taxpayers.

Will they get a post-election ‘haircut’? 

One way or another, each of the Opposition parties say that – if elected – they would compel senior bond investors to bear losses. This is controversial because Ireland’s European sponsors – the European Central Bank (ECB) especially – are trenchantly resistant to senior bond “haircuts”. The Government explored this before Ireland’s EU-IMF bailout last November but it was ruled out. It was dismissed again last Monday.

Why does Europe say no? 

The ECB, which has provided more than €130 billion to Irish banks, fears that any move to default on money due to senior bondholders would trigger contagion in eurozone bank markets. Removing protection from the highest-ranked bond investors in one euro country would create a threat to investors in vulnerable banks elsewhere. This threat could lead to runs on deposits from weak banks in other euro countries, with a consequent threat to apparently secure banks, too.

So why advocate a default? 

Because of the acute sense of injustice that surrounds Ireland’s bank rescue. To date, taxpayers have provided around €45 billion to Ireland’s banks. In essence, the argument is that the banks would need less new capital from the State if they were not obliged to repay senior bond investors in full.

Who are the bondholders? 

There is no official register of bondholders. Banks, pension funds and other institutional investors frequently hold senior bonds as a secure, if unspectacular, investment.

However, European sources this week gave credence to an academic evaluation of Irish Central Bank data that shows a little above half of all Irish bank bonds are held not by shadowy international speculators but within Ireland.

University College Cork lecturer Seamus Coffey says investors elsewhere in the eurozone and in London have significantly reduced their holdings of Irish bank bonds. Many of these have been transferred to Ireland. Coffey estimates that Irish-domiciled investors were owed €33 billion at the end of 2010, investors elsewhere in the eurozone were owed €10 billion, and investors in the rest of world were owed €20.5 billion.

So “burning the bondholders” would be an act of national self-harm? 

In the event of a default, a 25 per cent haircut for senior bondholders would be regarded as severe, triggering a financial loss for the holder. Though it is not known whether Irish banks hold each other’s senior bonds, if Irish banks suffered losses on each other’s bonds in this way, they might need yet more new capital.

For Ireland, any default must be measured against the risks. Ireland’s banks are dependent on ECB funding, as they are essentially shut out of the open market. Senior bond default would significantly increase funding costs, lessening prospects for any early return to the private inter-bank lending system. This is at odds with the ECB’s objective of weaning all banks off emergency financial aid.

It would also be likely to further tarnish the damaged credentials of the State. The aim of the bailout, after all, is to ensure Ireland regains the credibility required to borrow again from private investors.

In short? 

Don’t expect any move soon in this direction. In Ireland these days, Europe calls the shots.

source: http://www.irishtimes.com/newspaper/weekend/2011/0219/1224290263040.html

Paul Maher sends us this mail


Paul Maher

To my mind, walking away from or defaulting on a mortgage in negative equity, makes perfect personal
economic sense. You survive. You learn. You live to fight another day without the millstone around your
neck. No longer would you have the crushing weight pounding and squeezing your head. Best of all, in the
event of your premature demise, your wife and children would not be saddled with the debt.
Now, imagine you are Ireland and you’re married to Brian Cowen. Brian insists on doing the “honourable”
thing and continues making payments on the Negative Equity Senior Bond ( NESBO). Unfortunately, for
you, Brian is getting a divorce in March and leaving you, Ireland his wife, and us his children, stuck with
this NESBO. Imagine your surprise when you find out that a Senior Bond holder, Goldman Sachs, uses
your Four billion euro payment to help fund it’s Ten billion euro  Employee Bonus  Plan. That’s right.
Goldman Sachs has used your money to help pay this outrageous bonus to it’s employees. GS is only
one Bondholder. Think of the good use the other Bondholders will put your childrens money to !!
There is no dishonour in defaulting on this Odious Debt. But how would a career politician with no life
experience or backbone  know that?
Paul Maher, Roscrea, Co.Tipperary


I agree with you Paul on this one


The Monte scam is been palyed on the Irish Taxpayers

Brian Lenihan is trying on the Three Card Monte with the taxpayers of this country

He and Cowen are no better than those street hustlers trying to rob you of your money  

They are three round discs The Banks (Disc 1 with white spot ), The Bond Holders (disc2) and the tax payers of this country (last disc The Mark : me and you the taxpayers)

In the video we see a female using her feminine charm to win over the mark Cowen and lenihan are also using their political nationalistic charm to win over the taxpayers (for the good of the Nation crap)

So when the scam is done after the Budget is passed the scammers run away and we the taxpayers are left to pay all the bills

The Bank directors ,the Developers, and the Bondholders and their political lackeys  are all part of the scam team .We the taxpayers are the onlookers (The Mark) sucked into the deal by Lenihan and Cowen telling we will make money with NAMA only to be cleaned out by the scam merchants.

Now what are you going to do about it now that you know ???

Accounting gimmickry at the Dept Finance ?


 Originally Posted:

By Gavin Sheridan 11 Nov 2010 02:42 AM


Last month Anglo confirmed that it had repaid €7.9bn in bonds at the end of September. According to the Irish Independent:

Banking sources yesterday stressed that there was never any question of Anglo not repaying the debt that fell due in September, since the bank is legally obliged to pay government-guaranteed debt.

The Department of Finance categorically rejected suggestions that it had been involved in any deal to refinance Anglo’s balance sheet, stressing that funding matters are handled by the bank.

The exact details of the September refinancing are unclear but it is understood that the bulk of the money came from the ECB, with Anglo pledging various securities as collateral.

Market sources stress that this is the normal way for Irish banks to refinance bonds that fall due, given the state of the international markets.

A spokesman for the Central Bank said “all of the guaranteed bonds issued by Irish banks have been repaid by the Irish banks as they fell due”.

Here is a spreadsheet from the CB. Look close at the ‘other assets’ and notice the jump from August to September. In August the other assets of our Central Bank amounted to €14,378 million. By the end of September, the figure had jumped to €21,195 million, a jump of €6.8bn. Historically, this is the biggest jump in other assets, excluding the period around Anglo nationalisation (Feb 2009) and the period around the Northern Rock crisis (September 2007). But what better illustrates this is a graph. So here is a timeline of ‘other assets’ of our Central Bank from 2003 to September 2010:

So the question is: Where did Anglo Irish get €7.9bn to pay back bondholders, and did our Central Bank foot the bill? And how involved were the ECB in this transaction? If the CB did what it looks like they did, we essentially just transferred the ‘asset’ from one state agency to another.

source http://www.thestory.ie


Lenihan is just shifting figures from one corrupt state institution to another.

Accounting gimmickry at the Dept Finance ?

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