Written Answers - State Banking Sector

Wednesday, 6 June 2012

Dáil Éireann Debate
Vol. 767 No. 1

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  69.  Deputy Pearse Doherty  Information on Pearse Doherty  Zoom on Pearse Doherty   asked the Minister for Finance  Information on Michael Noonan  Zoom on Michael Noonan   if he will confirm that it is the intention of the Irish Bank Resolution Corporation to pay in full the two unsecured, unguaranteed senior bonds that fall due on 26 June, 2012; if he will confirm the sums to be paid and the identity of the bondholders; and if he has taken steps to reduce or defer these payments. [26308/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan  Zoom on Michael Noonan  As the Deputy is aware the Government is committed to delivering a return to a successful vibrant economy. In this context I have indicated that there is no private sector involvement for senior bank paper or Irish Sovereign debt without the agreement of our external partners. This commitment has been agreed without external partners and is now the basis on which Ireland’s future financing strategy is built. This strategy is working well as evidenced by the reduction in pricing of Irish Sovereign debt in the secondary markets and the recent successful bond exchange offer by the NTMA.

IBRC has confirmed that two unguaranteed senior bonds with a combined principal value of €0.6bn are scheduled to mature on 26 June 2012. IBRC’s position on its publicly traded securities remains unchanged. The Bank is contractually obliged to repay senior securities on their maturity dates.

As already indicated it is not possible to identify bond holders with any degree of certainty. Such securities are freely tradable once issued and therefore the issuer (i.e. the Bank) has no means of establishing the underlying ownership. These securities are publicly traded and dealt through market participants and settled by clearing house systems. An issuer does not have any access to the records of the clearing house. At maturity, the Bank will instruct its paying agent to transfer the funds due to the clearing house who will then distribute the funds to the holders of the securities as per their records.

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