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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Close Enh Ii | CED2 | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
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|---|---|---|---|---|
| 0.00 | 0.00% | 141.25 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 141.25 | 141.25 |
| Top Posts |
|---|
Posted at 02/6/2011 11:17 by davebowler Irish Times article;State forces bondholders to share in bank losses In this section » Greek aid talks to be separate from bailout discussion Energy U-turn may cause price hikes 12bn decline in bank deposits in April is smallest since September LAURA SLATTERY BANK OF Ireland, Irish Life & Permanent and EBS have joined AIB in announcing plans to impose losses of as much as 90 per cent on junior bondholders. Minister for Finance Michael Noonan said the move to "burn" the junior, or subordinated, bondholders was in line with Government policy to achieve "appropriate" contributions to the recapitalisation of the banks from investors. "These financial institutions are remaining solvent due to the ongoing overwhelming financial support of the State. Without this support, subordinated bondholders' entire investment would have been irrecoverable," he said. The offers propose bigger haircuts on bondholders than had been expected by market analysts. Although the offers are voluntary, Mr Noonan warned that the levels of burden-sharing proposed by the banks were "the minimum acceptable". If they did not help recapitalise the banks as expected, the Government would take alternative steps under the existing legislation to ensure that haircuts were imposed on the bondholders. This would result in "severe measures" being taken in respect of the subordinated debt, he warned. Mr Noonan is already facing a High Court challenge by two investors against a subordinated liability order in relation to AIB. The order allows him to change terms, conditions and maturity dates on its subordinated bonds. The case taken by Aurelius Capital Management and Abadi Co both New York-based fund managers will be heard tomorrow. Yesterday, Mr Noonan reiterated his view that the challenges were "entirely unfounded". Bank of Ireland said it would launch a liability management exercise covering 2.6 billion of its subordinated debt. The plan will be structured so that subordinated bondholders contribute around 2 billion of its regulatory requirement to maintain Core Tier 1 capital of 4.2 billion. The bank was ordered earlier this year to raise 5.2 billion, including 1 billion in contingent capital. The bank said its expectation was that it would offer subordinated bondholders 10 per cent of the nominal value of Tier 1 securities and 20 per cent of the nominal value of Tier 2 securities, in exchange for cash, with no settlement for accrued interest. The bank said it might also offer an equity-swap alternative at a premium to the cash offer, with a payment of accrued interest. "We were expecting the terms of the offer to be bad, but this is worse than expected," said Stephen Lyons, fixed-income analyst with stockbroking firm Davy. "Another approach would have to been to engage with subordinated bondholders and not leave such a bad taste in the mouths." The Irish Life & Permanent plan involves a cash offer in respect of 840 million of its subordinated debt. It said it expected to offer 20 per cent of the nominal value of most of the securities, with no settlement for accrued interest. Holders of one security will be offered just under 9 per cent. The lender needs to raise 4 billion to satisfy regulatory thresholds. EBS Building Society, which must raise 1.5 billion, said it would offer to buy back 160 million in junior securities due in 2014 and 2016, as well as £30 million in fixed-rate subordinated securities due in 2019. The haircut imposed will be 80 per cent. EBS said it will seek to pass an extraordinary resolution to amend terms of bonds so that holders who refuse to take up the offer may be paid just 1 cent in the future for every $1,000 of debt. The success of the exchange offer will determine how much banks need to raise from a share sale. (Additional reporting: Bloomberg) |
Posted at 28/4/2011 12:59 by sharpshare Will CED2 investors get a haircut on the Irish Life and Permanent bond? |
Posted at 09/11/2010 11:45 by davebowler I calculate GRY of about 15% to June 13, so investors must be wary of the counterparty exposure. |
Posted at 24/6/2008 12:01 by praipus Perhaps that is not such a bad thing. Maybe this is the next split cap type opportunity in which pessimism undervalues until wind-up. Investors can load up on the way down and scoop the cash in 2013.I liked erstwhile2's comments on the CED thread. I was not aware of ETF's for commodities and am disappointed I hadnt bought a few more a long time ago. Mind you I'm not a seller here inspite of counterparty fears. |
Posted at 13/6/2008 12:02 by praipus Excellent thanks davebowler, fascinating just poses more questions. How easy is it for these guys to walk from their obligations? What recourse does the private investor have if it goes wrong? It seems to me it would actually be in their (the conterparties) interest to default asssuming commodities continue to rise they would have to pay out. Probability today does not seem to be in their favour. Fundamentally our interests are not aligned it would seem. We win they loose, they win we loose. Or is there a win win element? |
Posted at 20/3/2008 17:14 by praipus From the FT.comCommodity prices part speculative - IMF By Javier Blas, Commodities Correspondent Published: March 20 2008 13:02 | Last updated: March 20 2008 13:02 The strength of commodities prices, such as crude oil, this year is explained in a large part by speculative factors such as investors piling into the new asset class and the weakness of the US dollar, the International Monetary Fund said on Thursday. The warning came as commodities prices fell across the board, with oil prices dropping below the $100 a barrel level, gold prices tumbling 10 per cent from their recent record above $1,000 a troy ounce and sharp falls in base metals and grains. Commodities prices fell as investors, who have poured record amounts of money into raw materials so far this year, cut leverage and fled into cash and short-term US treasuries and bonds. The yield of the three-months US Treasury fell to a 50-year low of 0.56 per cent on Wednesday. John Reade, metals strategist at UBS in London, said: "It seems as if large-scale deleveraging is occurring across many asset classes and commodities as profitable and recently fashionable trades are being caught up in this trend." The fall in commodities prices, if sustained, could push down inflationary pressures both in developed and developing economies, analysts said. Until now, rising commodity prices have led to pressures on inflation, reducing central banks' room of manoeuvre to insulate their economies from the impact of the credit squeeze. The IMF said that the constellation of dollar depreciation and falling short-term real interest rates "has pushed up commodity prices through a number of channels, including by enhancing the attractiveness of commodities as an alternative asset." "Overall, these financial factors seem to explain a large part of the increase in crude oil prices so far in 2008, as well as the rising prices of other commodities," it said. It added that as global economic growth is widely expected to decline this year and in 2009, "prices of most commodities should eventually start easing." However, it added that "unless there is a substantial global downturn, however, the extent of easing may be small, given the current tight balances in some commodity markets." The IMF said that in all recent global downturns, commodity prices declined sharply, "suggesting a disconnect between commodity prices and the ongoing slowdown." However, it added that much of the apparent disconnect reflected the fact that developing countries, which have been responsible for the bulk of recent commodity demand growth, have so far been less affected by the slowing growth. "The resilience of high commodity prices will depend on the extent of spillovers of slowing growth in advanced economies to the rest of the world," it said. Crude oil prices fell to a three-week low below $100 a barrel. Nymex May West Texas Intermediate drop $3.34 to $99.20 a barrel, well below the all-time high of $111.80 a barrel it set earlier this week. In the base metals market, copper dropped to a month-low. On the London Metal Exchange, three-months forward copper fell 2.8 per cent to $7,710 a tonne while aluminium dropped 2.8 per cent to $2,837 a tonne. Agricultural commodities also fell sharply. CBOT May corn fell to a month-low of $5.08 a bushel, down 3.7 per cent on the day. CBOT May wheat also dropped to a month-low of $10.36 a bushel, down 3.5 per cent on the day. CBOT May soyabeans plunged to a two-month low of $12.07 a bushel, down nearly 4.0 per cent on the day. Copyright The Financial Times Limited 2008 |
Posted at 12/2/2008 14:24 by bangor Quotes below - also see AIGA thread:American International Group (AIG) revealed yesterday its auditors had questioned whether it had properly valued its derivatives portfolio, raising new questions about accounting practices at the world's largest insurance firm. The disclosure sent AIG shares down 11pc and cast doubt on the company's previous contention that it does not face major problems stemming from the credit crisis that has hit other financial institutions. "(We) believe AIG management will have an extremely difficult time regaining investor confidence," said Standard & Poor's. S&P said the company's problems with valuing the derivatives portfolio were "very troubling". The announcement "will leave investors worrying about other skeletons in the closet,'' said Nigel Dally, an analyst at Morgan Stanley. "Investors should brace for a mark-to-market loss of roughly $5bn in the upcoming quarterly results.'' |
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