Non-payment of interest ‘standard’

FINANCE Minister Brian Lenihan said the European Commission’s requirement that Anglo Irish Bank not pay interest on Tier 1 subordinated debt is a “standard practice” and “fully expected by the Government”.

“The Government has always made clear that holders of subordinated debt would have to take losses,” he said in an statement issued late yesterday in Dublin after Anglo Irish said it may stop coupon payments on the securities.

The ministry also said that in May he “welcomed the bank’s intention to buy back certain outstanding subordinated loans from bondholders at a significant discount to par value”.