Tuesday 10 December 2019

IBRC's €2.1bn cash pile could fund bondholder payouts

Fianna Fáil finance spokesperson Michael McGrath
Fianna Fáil finance spokesperson Michael McGrath

Donal O'Donovan and Colm Kelpie

Liquidators of IBRC have €2.1bn in cash left over from the mass sell-off of loans, the Irish Independent has learned.

The size of the liquidators' pot, left over after the Central Bank got the bulk of cash raised by selling off business and home loans, means former Anglo Irish Bank junior bondholders are closer to recouping €270m owed since the rescue of the bust bank in 2008.

Only bondholders who successfully fought off a legal move by the bank back in 2010 to "burn" them by imposing losses are still in line to get paid.

The bondholder claim ranks behind €1.1bn owed to the State in the line of priority for payment, but taxpayers have no hope of recovering the bulk of the €34bn sunk into the former Anglo Irish Bank and Irish Nationwide Building Society, which merged to form IBRC.

The €2.1bn figure is contained in a written response to a question from Fianna Fáil TD Michael McGrath to Finance Minister Michael Noonan.

The reply indicates that liquidators have enough cash to pay bondholders but says its uncertain if or when that will happen.

"The ultimate level of dividend paid, if any, to each creditor cannot be known until such time as all loan assets are sold, the total level of adjudicated creditors is finalised and the other contingent creditor claims which may crystallise, including those from litigation, are known."

A major uncertainty is the outcome of long running legal cases including claims and counterclaims for sums running into billions of euro between IBRC and the family of businessman Sean Quinn.

IBRC's special liquidators, Kieran Wallace and Eamonn Richardson, will publish an update on the winding up of the former bank over the next two months, according to the minister.

Even the threat of a bondholder pay out is politically toxic given the losses suffered by taxpayer.

New Central Bank Governor Philip Lane met yesterday with the Ballyhea Says No protest group, which has been opposed to bondholder bailouts, and with a number of politicians.

"Far from being the 'redundant' issue as described by Tánaiste Joan Burton in the past week, due to the IBRC bond sale (legacy of the Anglo Irish Bank/INBS Promissory Notes), bank debt is very alive and kicking," its spokesman, Diarmuid O'Flyn, said following the meeting.

Mr O'Flynn said the political will does not exist to take action that could limit further ongoing losses on debts associated with the bank bailouts, but said he believes the group has an "ally" in Governor Lane.

The Ballyhea campaign wants candidates in the General Election to back the formation of a cross-party Dáil committee to address the issue.

Irish Independent

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