Anglo warns against collateral changes
Published 19/07/2011 | 05:00
Anglo Irish Bank has warned that if either the ECB or the Irish Central Bank change the rules on what collateral they accept for loans it will have a major impact on the bank's future.
In a new bond prospectus, prepared in order to gain further access to central bank support, the bank warns that its dependence on Irish Central Bank support has increased since February.
At the end of the year it stood at €28.1bn, while the bank (now known as IBRC) was dependent on overall support of €45bn from the ECB and the Irish Central Bank.
The prospectus states that 70pc of Anglo's funding now comes from central banks.
"This support has increased following the transfer on 24 February 2011 of certain of the group's deposits and NAMA bonds under the transfer order made by the Irish High Court," it states.
"If the monetary authorities materially change their eligibility criteria or limit the issuer and the group's access to such special funding facilities without providing an alternative funding source, it would adversely affect the issuer and the group's financial condition.
"Additionally, credit rating downgrades may impact on the eligibility of assets currently pledged as collateral for central bank open market sale and repurchase agreements,'' it added.