merrion street

The Minister for Finance, Mr. Michael Noonan T.D., today said:

“I welcome the announcement by AIB that in excess of 86% of the nominal amount of the 15 securities held by subordinated bondholders has been tendered in the first phase of the bank’s Liability Management Exercise (“LME”). Additionally, after the bondholder meetings this week, the nominal amount effectively tendered is likely to increase further. This high level of participation is encouraging.

The majority of the remaining amount not tendered relates to one bond, which is subject to court action taken by a single investor over the terms of the Subordinated Liability Order issued by the High Court in respect of AIB on 14 April 2011.

Completion of the first phase of the LME will reduce the core tier 1 capital requirement of AIB from the State by approximately €1.6bn. It is anticipated that the level of core tier 1 capital required from the State will reduce further following the second phase of the LME, which completes in July.

It is Government policy to achieve appropriate burden-sharing from holders of bank subordinated debt, not only in AIB but also in Bank of Ireland, EBS Building Society and Irish Life & Permanent, where liability management exercises are all underway. I would like to restate my commitment to take whatever steps are necessary under the Stabilisation Act or otherwise to ensure that the required level of burden sharing in all of these banks is achieved.”