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Bank says it has repaid €7.9bn of bonds in full

ANGLO Irish Bank yesterday confirmed it had repaid €7.9bn of bonds in full last month, but stressed that the payments were entirely normal since the bonds had been state-guaranteed.

The commentary came as political furore mounted over the fact that state-rescued Anglo had repaid the full value of the bonds, despite Anglo's mounting losses.

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".

Following the latest pay down of debt, Anglo Irish Bank now owes €6.68bn in senior bonds and €2.36bn in subordinated bonds.

The government guarantee covers €2.68bn of the remaining senior bonds but the State has said it will honour all senior debt.

A buyback launched last week aims to cut €1.6bn from the remaining subordinated bonds.

Previous buybacks of senior and subordinated bonds netted gains for the bank of €1.7bn, according to the Department of Finance.

Irish Independent