Elderfield contradicts Lenihan on senior bondholders

jimbo99

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FT Alphaville has picked up on this. All the Irish banks debt has been placed on the potential downgrade list.

I'd say Elderfield is probably on the receiving end of a tirade from Lenihan right about now.
I doubt sure isn't the financial regulator independent.
 


SPQR

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You might do well to actually watch what he said rather than trust the RTE website to summarise what he said. He did say that but he mentioned it in the context of offering them alternatives options - like an early cash in at a reduced rate. He saw no reason why it wasn't a possibility, but he did not contradict Lenihan. Sean Whelan later suggested that the savings would most likely be of limited value assuming the negotiations even happened.
You is on de wrong website for that, squire! Kneejerk reactions only please!
 

He3

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I can clarify things a bit more...

  • There is an urgent need for a new bank resolution framework, so that bondholders who have a loss imposed on them cannot cry 'event of default' and petition for the winding up of the bank. This is the general position supported by the IMF, BIS and EU Commission. See here: International position on bank resolution and bondholder haircuts
  • It was formally recommended by the IMF, months ago, that the Irish government institute such a framework, but it has not done so, and no relevant legislation features on the list recently announced at the commencement of the new Dáil term.
  • Unfortunately, there is less and less bondholder funds to be burnt. Since September 2008, billions worth of existing bonds have matured and been replaced with debt that is effectively state guaranteed in perpetuity.
Thanks for that.

No one has yet offered an answer to the question I asked in the OP - how much has been returned to senior bondholders at a wasteful 100% return rate so far? You say that it runs to billions and I'm sure you are right. It may seem pointless to ask how many billions, but sure we may as well ask. It was our money once after all...

The wilful refusal to legislate for a resolution regime (in the teeth of 'the best advice') has cost us a bomb and continues to cost us.
 
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Aindriu

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Feducci

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OK Lenihan says senior bondholders/depositors are the same thing.
This has been going on for ages here.
Anybody know the answer?
No Opinions please? We all have them. Anybody with expertise?
I don't trust Lenihan.
3 things...
McWilliams says burn senior bond holders.
Elderfield hints at it.
McWilliams points out that the Russian is pissed (Bramovich...?)

Raises an intersting question...how many senior bond holders bailed and sold their debt to financial terrorists?
Are these the people Lenihan, inadvertently, is anxious to protect? ... at all costs?


"I can spell...But I can't tpye"
 

turdsl

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Hasn't Lenihan been saying it would illegal to do this though, giving the impression it is impossible?


When will people stop treating Lenihan like the pope. he is not infallible, in fact he is wrong most of the time.
 

jimbo99

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When will people stop treating Lenihan like the pope. he is not infallible, in fact he is wrong most of the time.
Well for the last two years anyhow. Put a barrister in charge of finance, what do you expect.
 

MPB

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I can clarify things a bit more...

  • There is an urgent need for a new bank resolution framework, so that bondholders who have a loss imposed on them cannot cry 'event of default' and petition for the winding up of the bank. This is the general position supported by the IMF, BIS and EU Commission. See here: International position on bank resolution and bondholder haircuts
  • It was formally recommended by the IMF, months ago, that the Irish government institute such a framework, but it has not done so, and no relevant legislation features on the list recently announced at the commencement of the new Dáil term.
  • Unfortunately, there is less and less bondholder funds to be burnt. Since September 2008, billions worth of existing bonds have matured and been replaced with debt that is effectively state guaranteed in perpetuity.
I remember reading that at the time but just thought that it was something that would happen as a matter of course.

I should have known better of course, as FF never cease to bewilder and disappoint.
 

jimbo99

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I remember reading that at the time but just thought that it was something that would happen as a matter of course.

I should have known better of course, as FF never cease to bewilder and disappoint.
Makes you wonder if any of these bondholders are some of FF's secret admirers from their 20 years of raping the state.
 

MPB

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No, that would take screwing the depositors. I know you think that's OK too, but most sane people know it wouldn't be "OK".
I know you like to misquote and quote selectively to suit your particular brand of trolling but for the record I would cover Anglo depositors with a guarantee.

The guarantee however would have terms and conditions, set down by the Irish State on behalf of the people doing all of these deposit holders a huge favour,by insuring their foolishness.

You see my brand of leadership would involve knowing exactly where I stood and letting others, no matter how rich, know exactly where they stand.

The Irish Taxpayer is under no obligation to guarantee any investments in Private Banks. The investors need to feel like they owe us, not the other way round.

Of course the yellow bellies in FF would not understand courage. They are more used to stealing from sick funds and blaming the dead for all the corruption.

Do not worry Chronic, your days are numbered, the last FF gravy train is leaving the station. Try and make sure you are on it, but watch your back, I would not trust your fellow passengers.
 

MPB

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Makes you wonder if any of these bondholders are some of FF's secret admirers from their 20 years of raping the state.
Don,t worry the tide is going out and we are not far from seeing exactly who has been swimming in the nip.
 

4horsemen

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Makes you wonder if any of these bondholders are some of FF's secret admirers from their 20 years of raping the state.
This returns us to one of the most important questions - Why are the names of Anglo's bond holders confidential? This bank is bankrupt and we the citizens of Ireland are saving the skins of depositors and bond holders who have no entitlement to our magificance. We have essentially liquidated the bank and should only pay off NAMED depositors and bond holders.
 

turdsl

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You truly are an eejit.

Elderfield clearly said any negotiations would have to be entirely voluntary on the part of the bondholders, there could be no question of forcing them to take a cut.

Not while Brian Lenihan is in office. Lets hope that comes to end fast, then someone that has an interest in the Irish people,not someone in Russia. will do what is necessary. We have to be told who the rest those people are.
 

GDPR

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I know you like to misquote and quote selectively to suit your particular brand of trolling but for the record I would cover Anglo depositors with a guarantee.
Yeah, legally how would you do that and even if you could, where would you get the 50 odd billion necessary to cover the deposits?



You see my brand of leadership would involve knowing exactly where I stood and letting others, no matter how rich, know exactly where they stand.
Your brand of "leadership" would have us gone down the tubes, long since. You're on the internet FFS and you're not even very good at that.
 

GDPR

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Not while Brian Lenihan is in office. Lets hope that comes to end fast, then someone that has an interest in the Irish people,not someone in Russia. will do what is necessary. We have to be told who the rest those people are.
Why? Do you think Lenihan is a secret Chelsea supporter and that's why he's "protecting" the bondholders?

Try to get a grasp on this, just because you don’t understand something, doesn’t necessarily mean that it must be wrong.
 

strider

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OK Lenihan says senior bondholders/depositors are the same thing.
This has been going on for ages here.
Anybody know the answer?
No Opinions please? We all have them. Anybody with expertise?

Senior Bondholders are NOT the same as depositors but both are ranked equally in a liquidation. If the bank is liquidated, they both receive the same percentage of their investment back.
Depositors can withdraw their funds anytime (Demand Deposits) or on the agreed maturity date for Fixed Deposits. Failure to repay Deposits on demand or agreed date is a default,
Senior Bondholders are entitled to the par value of their bonds on the fixed maturity date, and receive interest payments (coupons) throughout the life of the bond. Failure to pay coupons or to repay principal in full at maturity is a default. Default triggers the guarantee. Similarities end here.

Bonds can be bought back by the issuer at any stage of their life; the issuer tells the bond holders where they will pay to buy them back, and the holders can sell them or keep them. Retiring bonds at below face value in this way is not a default, as the bond holder has the option to take a loss now or wait until maturity and hope for full repayment.

Basically, Senior Bondholders can be negotiated with to see what haircut they would accept; current market price is a good starting point for such a negotiation. They cannot be made suffer a 100% loss, ie they won't sell their bonds back at zero. The key is to pitch the buyback price at a loss level that they are prepared to bear rather than continuing to bear the risk until maturity. Whatever loss they agree to take reduces the burden on the taxpayer without a default arising.
 


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