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From Eurointelligence: On the Brink (again)
Ireland ready to wipe out senior guaranteed bond holders

This was a great day for Ireland to throw in its own bombshell. In an interview with Irish television RTE, finance Minister Michael Noonan said Ireland will propose plan to impose big losses on some senior bondholders in Anglo Irish Bank and Irish Nationwide Building Society. He said he was seeking assistence from the senior bond holders "because we don't think the Irish taxpayer should have to redeem what has become speculative investment. I don't think it should be redeemed." He also hinted that the changeover from Jean-Claude Trichet to Mario Draghi at the ECB might make it easier for Ireland to pursuade the ECB. Apparently he got no sympathy from the IMF. When asked whether the IMF agreed with him, he said: "I got an agreement that they understood our position fully."

Ireland's risky threat of a haircut on senior bond holders

BreakingViews writes that Michael Noonan has picked a risky moment to stage a raid on bank creditors. The move is a direct challenge to the European Central Bank. It will also further rattle markets already spooked by talk of a Greek restructuring. "Ireland has previously avoided forcing haircuts on senior bank bondholders due to opposition from the ECB, its main creditor. It could be that Germany's public spat with the ECB has given the Irish government the confidence to take a stand. Alternatively, Dublin could be playing a high-stakes game of poker to get a reduced interest rate on its own bailout while preserving its advantageous corporate tax regime.



Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Thu Jun 16th, 2011 at 03:56:10 AM EST
unsecured or secured, unguaranted or guraranted?

Irish times says "senior unsecured unguaranteed bonds"

by IM on Thu Jun 16th, 2011 at 04:19:28 AM EST
[ Parent ]
They are senior unsecured.

But they are guaranteed by the blanket government guarantee issued by the Irish in 2008.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Thu Jun 16th, 2011 at 04:27:35 AM EST
[ Parent ]
Maybe "unguaranteed" refers to bonds issued after the Irish government guarantee was announced, though precisely how you would argue that in a bankruptcy court is beyond me.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Thu Jun 16th, 2011 at 06:15:56 AM EST
[ Parent ]

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