The plot thickens.
This came in yesterday from Reuters and seems to have received almost no notice at all. Which I find strange as it looks to me that it confirms WhistleblowerIRL’s post.
DUBLIN, July 22 | Fri Jul 22, 2011 6:48am EDT
(Reuters) – The International Swaps and Derivatives Association (ISDA) on Friday set July 28 for an auction to settle credit default swaps (CDS) in relation to Bank of Ireland after ruling that the bank had suffered a restructuring credit event.
The ISDA said a restructuring credit event occurred after Bank of Ireland closed an offer to buy back about 2.6 billion euros of Tier 1 and Tier 2 subordinated debt at a discount of up to 90 percent earlier this month.
A credit event is financial industry jargon for default on payment, breach of bond covenants or other event that casts doubt on an issuer’s ability to service its debt. (Reporting by Conor Humphries)
WhistleblowerIRL said he was told one of the last two major Irish Banks to have not yet crashed was about to be nationalized. In my mind that had to be Bank of Ireland. The Bank of Ireland did spend an unusual amount of time on my blog yesterday. But nothing at all in the main stream press. Then late yesterday Reuters says Bank of Ireland had defaulted on payment and was trying to buy back 2.6 billion in Tier one and two subordinated debt.
For those who don’t know the ISDA is the body which sets the standards for all swaps deals other than some private over the counter deals done direct between buyer and seller. Any market based deal adheres to the ISDA standards. So the ISDA know what they are talking about. This is a deal they are fully aware of and not in any way just a market rumour.
A “restructuring credit event” is what Greece is trying to avoid. It is, as the article says a default on debt. And this is a LARGE default. 2.6 BILLIONS large and a 90%!! loss for the bond holders. And this was ‘earlier’ this month.
Now either I have completely misunderstood what this is or I have to ask why this wasn’t news back then or even today? Weeks ago, Ireland’s last standing bank tried to buy back at a 90% discount (90% loss from face value for those holding that debt) and no one said a word?
If this is what it seems, then this must be the rumour WhistleblowerIRL had heard. I will try to talk to him later today.
Bank of Ireland has defaulted on 2.6 billion of bonds and is trying to buy them back at a huge discount. Why it’s trying to buy them back is then the question and who does it help to do so?
Whoever it helps in the long run, bank or bond holders, the fact is Bank of Ireland is valuing a large chunk of its own Tier one and two subordinated debt as having lost 90% of its original value!
I think the Euro authorities will need to get that EFSF (European Financial Stability Facility) – the European IMF and Plunge Protection Team rolled in to one – fully funded and looking West to Ireland not just East and South to Greece, Portugal, Spain and Italy.
The Irish Establishment is to be congratulated on a complete and utter mare's nest!
All the economists who did not see any problem with the credit boom? All the supine and serpentine servants who spat in my direction and kept on shovelling paper at the banks. The politicians in Europe from Ireland. That includes FG. The journos who kept egging on useless consumption and churning of land from Billy to Jack. The priests who carried out the bidding of the papacy while diddling the kiddies. Now they let the parents burn while they diddle each other.
I am replete with anger, full of venom for my erstwhile colleagues. So smart that they knew the price of everything and the value of servility to kleptocratic morons who keep being re-elected.
The mire will reject their corrupt flesh and maggots will die if the flies lay on them.
I hope they print this out. To ensure that they do, ENDA KENNY, PAT RABBITTE, CATHERINE DAY.
I hope these names are detected! Have a good decade!
And those bank stress tests..
http://namawinelake.wordpress.com/2011/07/23/just-one-week-after-the-eba-stress-tests-one-spanish-bank-needs-e2-8bn-of-capital-more-than-the-eba-calculated-for-the-whole-of-europe-confirmation-that-the-stress-tests-were-a-joke/
Well you have got to laugh..
So, ladies & gentlemen, what was just a 'rumour' yesterday, is now beginning to look increasingly like a fact. The Irish Government has just made the following announcement (on a SATURDAY!):
Ireland says in talks over Bank of Ireland equity investment
DUBLIN, July 23 | Sat Jul 23, 2011 10:02am EDT
(Reuters) – The Irish government on Saturday said it was in talks with potential equity investors in Bank of Ireland (BKIR.I) as it struggles to keep its last major bank out of state control.
If the lender cannot find an investor or persuade its largely retail shareholder base to participate in a 1.91 billion euro ($2.8 billion) rights issue then the state, which is underwriting the offer, could end up with a 70 percent stake. [ID:nL6E7IB0O4]
"The State is in discussions with potential equity investors in Bank of Ireland in relation to a possible material investment in the bank," the Department of Finance said in a statement.
"As at the time of this announcement, these discussions continue and may or may not lead to a transaction."
Dublin has closed two of its six domestic lenders, merged another two state-controlled institutions and will soon take over a fifth as it seeks to draw a line under a banking crisis that forced the former Celtic Tiger economy into an EU-IMF bailout.
http://www.reuters.com/article/2011/07/23/bankofireland-idUSWLB840020110723
As the old saying goes – "There is no smoke without a fire…".
Thank you to PoliticalWorld.org for bringing this to my attention.
Regards,
WhistleblowerIRL
PS
Thank you to all of Golem's readers for your comments; I have not had the time to respond to each comment, but promise to do so in the coming days.