Banks unveil plans to make bondholders share burden

BANK of Ireland, Irish Life & Permanent (IL&P) and the EBS Building Society have announced plans to make bondholders contribute to their recapitalisation needs, thus reducing the amount of extra funding likely to be needed from the state.

The institutions — which need to raise €5.2 billion, €4 billion and €1.5 billion, respectively, in order to meet the most recent Central Bank stress test/capital requirements — are basically adhering to Government wishes.

Finance Minister Michael Noonan has said he wants to see holders of subordinated/high interest rate-linked bonds in the banks share a considerable amount of the burden associated with the overall recapitalisation effort.