Abramovich holding bonds in Irish Nationwide
Published 02/10/2010 | 05:00
Millhouse, an asset management company that operates on behalf of Russian billionaire Roman Abramovich, asked Ireland to honour bank securities after the Government said this week some investors would have to share the burden of rescuing the financial system.
Millhouse, based in Chelsea, west London, owns lower tier 2 bonds in Irish Nationwide Building Society (INBS), director Eugene Popov said yesterday. He declined to say how much of the securities Millhouse owns.
Finance Minister Brian Lenihan said this week that subordinated bondholders in Irish Nationwide would be treated the same as those in Anglo Irish Bank as the Government tries to limit the cost of a bailout which may reach €50bn.
While he has said it would be "unthinkable" to default on senior debt, he remarked that holders of Anglo's subordinated debt should share the costs.
Irish Nationwide sold £126m (€144m) of five-year lower tier 2 debt in August 2009, offering a coupon of 13pc and a government guarantee until yesterday. Lower tier 2 bonds are subordinated in that they typically take losses only when a lender is being wound up.
Irish Nationwide, which already received €2.7bn in state aid, needs that amount again, Mr Lenihan said yesterday.
Mr Popov said Millhouse would question the legality of any decision to compel bondholders to take losses on their securities.