Tuesday 24 October 2017

AIB bondholders not entitled to see report

Mary Carolan

A High Court judge has ruled that firms representing some junior bondholders in AIB are not entitled to be given a report which led to the Central Bank re-calculating AIB's recapitalisation needs at €13.3bn, up from a figure of €4.2bn.

The report -- by international asset management company BlackRock Solutions -- was sought in preparation for the legal challenge by two firms opposing Finance Minister Michael Noonan's decision last month to seek a Subordinated Liabilities Order to achieve some burden sharing by subordinated bondholders in AIB.

Mr Justice John Cooke yesterday ruled on discovery applications made by the firms, and by Mr Noonan, in advance of the June 2 hearing.

The applicant firms are British Virgin Islands-registered Abadi & Co Securities and Cayman Islands registered Aurelius Capital Master and linked firms.

Mr Noonan was not required to produce the BlackRock Solutions report as sought, the judge ruled. The Central Bank, not Mr Noonan, had decided AIB's recapitalisation requirement was €13.3bn and, as AIB was being supported by the State, Mr Noonan had to decide how that sum was to be raised.

Mr Noonan could not decide whether a lower figure should have been fixed by the Central Bank or whether AIB considered the stress testing of the banks too robust, the judge said.

In those circumstances, the judge ruled there was no requirement to discover the BlackRock Solutions report.

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