Buyback goes well for Nationwide

IRISH Nationwide has had a near-100% take-up for its coercive buyback of €170 million of subordinated debt at an 80% discount.

The nationalised lender, which is being wound down as part of the EU/IMF bailout, said investors holding €146m of bonds due 2016 and €24m of notes due 2018 had agreed to the buyback by an early deadline of March 8.

Irish Nationwide had said the offer applied to €146m of bonds due in 2015 and €24m due in 2018.

The company has extended the deadline for its early tender payment to March 18 due to the strong response.

Bondholders who do not accept the offer by March 18 will be offered 0.001% of the bonds’ face value.

Irish banks have been imposing losses on junior bondholders as part of government efforts to claw back some of the cost of bailing out the banks after years of reckless property lending.

The eventual cost of purging the banking sector of bad debts and recapitalising it could top €80 billion, more than half of Ireland’s annual economic output.