Anglo Irish Bank Share Discussion Threads

[lbo] 12/2/2009 14:11

It seems they contradict themselves! How long before they have full control by stealth?

"Following this recapitalisation, the State will not hold ordinary shares in either bank (other than existing NPRF holdings), but it will have an option to buy shares in five years time at a predetermined strike price, thus providing the State with the potential for a significant return"


BUT


"In return for the overall investment the Minister will get preference shares
with a fixed dividend of 8% payable in cash or ordinary shares"

[masurenguy] 12/2/2009 07:36

No further bank nationalization envisaged at the moment !
"The state does not intend to take control of these banks"
..........................................................

Independent.ie
Thursday February 12 2009

Govt unveils details of €7bn bank recapitalisation plan

The Government has announced details of its plan to invest €7bn of taxpayers' money into AIB and Bank of Ireland to help the through institutions in the current financial crisis. The deal will see €3.5bn invested in each bank in return for preference shares with a guaranteed dividend of 8%. The Government will also have the right to appoint one-quarter of directors at each bank and get a quarter of ordinary voting rights at board meetings.

In return for the cash, the two companies have agreed that bonuses for senior staff will not be paid in relation to 2008 and 2009, while salaries for senior executives will be cut by at least 33%. They have also agreed to increase lending to small businesses by 10% and to first-time buyers by 30%.

Finance Minister Brian Lenihan is insisting that the taxpayer will eventually benefit from the deal when the economy recovers.The Irish Banking Federation has welcomed the recapitalisation plan, saying it will provide stability and confidence to the banking sector and will reassure both businesses and mortgage borrowers.
_________________________________________________________________________

Government Announcement - 12 February 2009
Recapitalisation of Allied Irish Bank and Bank of Ireland

The Minister for Finance today announced that the Government has agreed the
recapitalisation terms to be offered to Allied Irish Bank and Bank of Ireland.
This follows the earlier Government announcement of 21 December 2008.

In view of the continuing turmoil in global financial markets, the Government
initiated further intensive discussions with Allied Irish Bank and Bank of
Ireland with a view to securing the position of these two banks. As a result of these discussions, the Government has decided on a comprehensive recapitalisation package which will reinforce the stability of our financial system, increase confidence in the banking system here, and facilitate the banks involved n lending to the economy.

The main features of the Government's investment are as follows:

* The Government will provide EUR3.5bn in Core Tier 1 capital for each bank.

* In return for the overall investment the Minister will get preference shares
with a fixed dividend of 8% payable in cash or ordinary shares in lieu. These
preference shares can be repurchased at par up to the fifth anniversary of the
issue and at 125% of face value thereafter.

* The Minister can appoint, in total, 25% of the directors to both banks.

* The Minister also gets 25% of total ordinary voting rights in respect of change
of control and board appointments.

* Warrants attached to the Preference Shares give an option to purchase up to 25% of the ordinary share capital of each bank existing on the date of issue of the New Preference Shares. The strike price of the first 15% of the Warrants
exercised by the State shall be EUR0.975 for AIB and EUR0.52 for BOI. The strike price of the balance of the Warrants shall be EUR0.375 for AIB and EUR0.20 for BOI.

* If the bank redeems up to EUR1.5bn of the State investment in New Preference Shares from privately sourced Core Tier 1 capital prior to 31 December 2009, then the Warrants will be reduced pro rata to that redemption to an amount representing not less than 15% of the ordinary shares of the bank.

* The recapitalisation programme will be funded from the National Pensions Reserve Fund. EUR4 billion will come from the Fund's current resources while EUR3 billion will be provided by means of a frontloading of the Exchequer contributions for 2009 and 2010. The necessary amending legislation to the National Pensions Reserve Fund Act will be introduced shortly.

The State does not intend to take control of these banks.

Following this recapitalisation, the State will not hold ordinary shares in either bank (other than existing NPRF holdings), but it will have an option to buy shares in five years time at a predetermined strike price, thus providing the State with the potential for a significant return.

The Government is also in discussions with the other covered institutions (Irish Life and Permanent, EBS and INBS) concerning their respective capital positions and about the review of the guarantee scheme. Anglo Irish Bank, under full public ownership, will continue to trade as a going concern.

[lbo] 08/2/2009 19:01

Regulator probes Anglo deposits

[lbo] 08/2/2009 18:58

Two cases of injury and innuendo


Watching Tommie Gorman's interview with wealthy businessman Sean Quinn on RTE last weekend, I couldn't help thinking of John Deegan

[lbo] 07/2/2009 15:05

Is this to pay down the personal family debt on the Anglo losses?

Quinn Group buys wind farm off family members

[masurenguy] 07/2/2009 11:25

CDSs are a type of debt insurance, guaranteeing a holder's money will be repaid in the event a bank/company goes bust. So, the riskier a bank, the more expensive it is to insure its debts and the higher its resultant CDS 'score'. Beyond 2,000, alarm bells start ringing. To put things into perspective, CDSs in Icelandic banks were trading near 3,000 basis points before they went bust.

Here's a list of Britain's most popular banks and building societies, which banking group they belong to in relation to the Financial Services Compensation Scheme (FSCS) and their CDS ratings:

ING Direct, Kaupthing Edge, Heritable Bank ING Direct N.V. €100,000 (approx. £77,000) is covered under the Dutch Depositors' Compensation Scheme: 102.2

Lloyds TSB, Cheltenham and Gloucester Lloyds TSB Group PLC £50,000: 116.0

Bank of Scotland, AA, Birmingham Midshires, Halifax, IF, Saga HBOS £50,000: 116.7

HSBC, First Direct HSBC Bank PLC £50,000: 117.9

Nationwide Nationwide Building Society £50,000: 125.7

Alliance and Leicester Banco Santander £50,000: 126.0

Abbey, Asda, Bradford and Bingley, Cahoot Banco Santander £50,000: 126.0

NatWest Royal Bank of Scotland £50,000: 133.3

RBS Royal Bank of Scotland £50,000: 133.3

Barclays, Woolwich Barclays Bank PLC £50,000: 175.3

Yorkshire Building Society Yorkshire Building Society £50,000: 199.8

Egg Citigroup £50,000: 319.6

Bank of Ireland, Post Office, Bristol and West Bank of Ireland Fully protected by the Irish government until Sept. 2010: 347.5

Anglo Irish Bank Anglo Irish Bank PLC Fully protected by the Irish government until Sept. 2010: 399.6

ICICI Bank ICICI Bank Limited £50,000: 594.5

Data correct as at 12pm, 6th February 2009. Source: Bloomberg.

ING Direct is currently the market's safest bet while Lloyds TSB takes second spot.

Barclays, which saw its shares jump after an open letter reassured investors of its continued good health, saw them plummet down again after rating agency Moody's cut its credit rating – a sign that the bank is not out of troubled waters yet. Barclays is also deemed the riskiest of the 'big five' banks, with a current CDS rate of 175.

The Irish banking system has also hit trouble recently with Ireland's third largest lender, Anglo Irish, nationalised last month. Irish banks have been deemed less safe than their English equivalents with CDSs hovering around the 400 mark.

Bringing up the rear is ICICI. Rumours were rife last year that the Indian bank could follow in the footsteps of its Icelandic counterparts, so much so that the bank plastered its credibility all over its website to try and reassure nervous investors not to pull money out. Four months on and the high interest rates they offer still suggest they are looking to shore up their balance sheets. However, CDSs in ICICI have halved since October and for now the market thinks it's reasonably safe bet.

Source: TMF UK.

[lbo] 05/2/2009 15:18

It was reported that O'Callaghan had borrowed personally from Anglo

Publisher teeters


Boston institution Houghton Mifflin Harcourt faces an uncertain future as textbook sales dry up and its owner reels under heavy debt

[what is a login ?] 05/2/2009 10:57

Thanks CP. Will Google Karl Marx quote hoax later.

[cpl593h] 04/2/2009 16:57

Google: karl marx quote hoax

It's generally accepted as a hoax.

[what is a login ?] 04/2/2009 13:03

Masurenguy, I have my doubts about the authenticity of that supposed Karl Marx quote. Even though I too was amazed by it when I saw it on another thread. What expensive goods could the working class afford in 1867 ? What technology? PCs? Mobile phones? I think the working class only began to benefit from bicycles in the 1890s...
I wonder if anyone has the time or inclination to check this out. The quote is supposedly from Das Kapital.

[lbo] 04/2/2009 11:05

ANGLO Irish bank loaned money to customers for the specific purpose of buying shares in the bank, it was confirmed yesterday.

[masurenguy] 02/2/2009 13:05

Absolutely amazing foresight even if the conclusion is wrong !
..............................................................

"Owners of capital will stimulate the working class to buy more and more expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism." Karl Marx 1867

[masurenguy] 01/2/2009 19:21

The Sunday Times
February 1, 2009

€7bn to be pumped into Irish banks
AIB and Bank of Ireland will also be insured by the state against €24bn in bad loans
Frank Fitzgibbon and Iain Dey

THE Irish government is to invest €7bn in Ireland's two biggest banks and insure them against more than €24bn in bad loans as part of a recapitalisation scheme to be put in place this week. Allied Irish Banks (AIB) and Bank of Ireland will each receive €3.5bn in new state investment in the form of preference shares. In addition, a scheme will be put in place that will transfer the risk attaching to 80% of the value of property-related loans on the banks' books to the taxpayers.

The Irish bailout comes just two weeks after Gordon Brown unveiled Britain's revised bank-support deal, which led to British taxpayers increasing their stake in Royal Bank of Scotland to 70% alongside hundreds of billions of pounds of additional support for the banking sector. The Irish banking bailout is expected to offer better terms to the banks than the UK scheme. The Irish preference shares will carry an interest rate of 8%, representing an annual payment to the state of €560m.

The scheme has been radically overhauled since it was unveiled late last year. Under the original deal, the Irish government intended to invest €2bn each into AIB and Bank of Ireland. It also promised to underwrite a €1bn share issue by each of the banks. The collapse in share prices since then has made it impossible for the banks to raise money from investors. The state is not only picking up the shortfall but is also increasing its initial commitment to the two banks from €6bn to €7bn. By investing in the banks in the form of preference shares the shareholdings of existing investors will be preserved. The insurance scheme will cover outstanding loans on development land and on part-completed construction projects that are now considered to have an uncertain future.

AIB and Bank of Ireland, which sells financial products through the Post Office, are believed to have more than €37bn in speculative property loans on their books. International risk consultants have identified the portion of those loans that are considered "most distressed" and these will be written off by the banks themselves in the first instance. The risk on the balance of speculative loans, approximately 80% of the total, will then be transferred to taxpayers, with the state in effect providing insurance on loans that subsequently have to be written off as bad. The banks will pay an upfront insurance premium to the government representing 2.5% of the value of the assets transferred. This will give the government an immediate cash injection of more than €750m. The scheme is to last until 2014, which will give the banks five years to "work out" their most problematic loans

[lbo] 01/2/2009 18:56

Back To Business, Emmet Oliver - Sean Quinn's 'Oprah moment' fails to convince



Ultra-secretive, reclusive, modest. That was the Sean Quinn of two years ago. Ireland's richest man was also the Sean Quinn of two years ago. The Sean Quinn of Friday's RTé interview was a different animal – defensive, gloomy and at times angry at his critics. Answering questions about a €1bn loss, in an Oprah-style TV moment, was not how it was meant to be.

As an exercise in answering some of the serious questions raised about the Quinn family's investment in Anglo, it did little to kill off external curiosity or remove the uncertainties.

The building up of a 25% stake in Anglo, via CFDs, has not been adequately explained so far and that includes the RTé interview of last Friday. Where a portion of this stake eventually ended up, after it was unwound by Sean Quinn and family members, is still not something the Quinn Group has come close to adequately addressing, nor has Anglo.

As someone who used to be celebrated as a canny investor and as a genuine entrepreneur, Quinn's admission that he wasn't "overly involved'' in Anglo Irish and "just went by the results'' seemed strange.

As someone whose investment nous is meant to be above that of mere mortals, one would have thought Quinn would have seen the warnings signs in Anglo's runaway property lending in the twice-yearly accounts posted to him as a shareholder.

There are real dangers lurking for Quinn and his company in the various investigations into the Anglo Irish stake building and how it was eventually unwound. Making an almost emotional play of the company's large employment contribution will be irrelevant to those enquiries.

Hard, verifiable, detailed facts about the stake building and Quinn's eventual exit mechanism is the only exercise worth engaging in by Quinn and his companies at this point.

[masurenguy] 01/2/2009 10:22

"dynamite demon - 30 Jan'09 - 12:55 - 4313 of 4314: Ireland's Government Debt Becomes Riskiest in the Euro Region"

Moody's warns it may downgrade Ireland
By Paul J Davies
January 30 2009

Moody's said the government liabilities that could possibly arise from the troubled banking system were considerable, but that debt remained low for now and thanks to budget surpluses of recent years there was some room to manoeuvre. "Ireland's Aaa ratings remain appropriate at this point, as the country entered the current financial crisis in a relatively favourable fiscal position and as it is too early to conclude that most of the factors that contributed to its economic vitality have been structurally eroded," Mr Hornung added.

[dynamite demon] 30/1/2009 12:55

Going back a couple of years who would have thought it.


Ireland's Government Debt Becomes Riskiest in the Euro Region
Email | Print | A A A

By Abigail Moses

Jan. 30 (Bloomberg) -- The cost of hedging against losses on Ireland's government debt climbed to the highest in the euro region, surpassing Greece's sovereign bonds, according to credit- default swaps.

Contracts on Ireland rose 2 basis points to 262.5, compared with 255 for Greece, according to CMA Datavision.

Credit-default swaps on Ireland also cost more than contracts on the debt of Chile, the Czech Republic, Israel, Malaysia, Saudi Arabia, Thailand and China, CMA prices showed.

Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company or country fail to adhere to its debt agreements.

To contact the reporter on this story: Abigail Moses in London at [e-mail]
Last Updated: January 30, 2009 07:22 EST

[lbo] 29/1/2009 22:01

Davy Stockbrokers has told clients who invested in the €413 million Irish Glass Bottle deal at Ringsend in Dublin that it has written down 60 per cent of its investment following a revaluation.

[lbo] 29/1/2009 21:46

DEVELOPERS: THE NATIONALISATION of Anglo Irish Bank means the taxpayer is now banker to most of the larger property investors and property speculators in the State




Anglo books are a who's who of the Celtic tigers




Quinn faces toughest test yet as insurers' profits tumble

[linney3] 27/1/2009 10:05

Fanning gets six naughts from Anglo to refinance four naughts! Cant imagine 5million of that being squandered on Smart Telecom at that time as that Comapny was a basket case.Would assume he used the money for other purposes and I note he is behind SLE now,along with other ex Smart cronies