Sunday 18 March 2018

Anglo losses 'won't be forced on bondholders'

Trichet pours cold water on debt suggestions despite Noonan's push for burden-sharing

ECB president Jean-Claude Trichet addressing his monthly news conference at the ECB headquarter in Frankfurt,
ECB president Jean-Claude Trichet addressing his monthly news conference at the ECB headquarter in Frankfurt, yesterday

Emmet Oliver and Laura Noonan

The chief executive of Anglo Irish Bank and ECB president Jean-Claude Trichet both poured cold water yesterday on suggestions the Government may be able to force losses on those holding €2.8bn worth of Anglo bonds.

A €700m bond at Anglo becomes due in early November and Finance Minister Michael Noonan previously committed himself to trying to force losses on this group during the autumn.

But Mike Aynsley, Anglo chief executive, said he was not "betting" on the ECB changing its stance on the issue. He also said any voluntary deal with bondholders at current prices was only likely to generate "very minor savings''.

It is understood the bond due for redemption in November is already trading at 95c in the euro, reducing the scope for any bond buyback or liability management moves.


Asked would the ECB continue to oppose Ireland moving against senior Anglo bondholders, Mr Aynsley, speaking in Dublin, said: "I don't know but their stance has been pretty clear." He said whatever approach was taken would have to be "consensual".

Meanwhile, Mr Trichet shot down the Government's latest attempt to force losses on senior bondholders, insisting there had been "absolutely no change" in his view that there should be no such action.

Speaking to journalists in Frankfurt yesterday, Mr Trichet also expressed bemusement that the issue was "recurrent and recurrent and recurrent" when the ECB had made its stance clear and the Government had committed to not proceeding with any action unless it was agreed.

The comments came after Mr Noonan last week said he was going to raise the issue of Anglo's unsecured senior bondholders with the ECB at a meeting of European finance chiefs in Poland in mid-September.

The Irish Independent understands the ECB categorically ruled out imposing losses on Anglo senior bondholders during the July mission to review Ireland's progress on the bailout.

Asked whether there had been any change in the ECB's position, Mr Trichet yesterday said there has been "absolutely no change in anything".

"I don't understand why this is recurrent and recurrent and recurrent," he said.

"The [ECB's] reasoning was very simple, do all that you can to improve credit worthiness, of the authorities, of the banking sector." The ECB boss also said he had "no information on any message that would be addressed to us", implying that Mr Noonan had not yet formally requested a meeting to discuss the Anglo senior bonds situation. Last night it became clear that Mr Trichet is definitely meeting Mr Noonan.

A spokesman for the Department of Finance last night declined to comment on the latest developments.

Irish banks are reliant on the ECB for €150bn of funding, including about €100bn loaned by Frankfurt directly and another €57bn channelled through the Central Bank of Ireland.

Mr Noonan has repeatedly said he would not go ahead with any action on the Anglo senior bonds unless it had been sanctioned by the ECB. He recently admitted the gains to be made from imposing losses on the bonds were not as "significant" as they had been.

Irish Independent

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