€21bn in bonds is guaranteed

ALMOST €21bn in senior bonds is guaranteed under the revised Government bank guarantee scheme, new figures from the Central Bank reveal.

The amount held in bonds by Irish banks has reached more than €63bn for the first time.

In a statement, the Central Bank said it had issued the data on a "once-off basis" in "the interests of providing public information".

At present the Irish banks are negotiating discounts of up to 80pc on more than €6bn in subordinated debt and savings of about €5bn is the potential gain.


Of those, roughly €23bn could be targeted by the incoming Government for "burning", or sharp, discounts.

The figures cover the six Irish financial institutions covered by the Government guarantees: AIB, Bank of Ireland, Irish Life Permanent, Anglo Irish Bank, EBS and Irish Nationwide.

The level of bondholder debt has been a prominent talking point in the election and bailout negotiations, with various commentators and politicians espousing the benefits of inflicting losses on bond investors.

Central Bank governor Patrick Honohan is concerned that any victory over the bondholders might come at a very high price and, for that reason, has put the amounts borrowed by the banks on the bond market into the public domain.