Forced sale of AIB bonds unfair, investor group tells High Court

A “MARKET-BASED solution” to taking out junior bondholders in AIB should have been adopted by the Government rather than seeking a court order forcing them to sell at huge losses, a Cayman Islands investment firm representing bondholders has told the High Court.

Mr Justice John Cooke heard yesterday that Aurelius Capital Master Ltd, which, along with some linked firms, is challenging the Subordinated Liabilities Order (SLO) obtained from the court last April, bought its AIB bonds in January.

The SLO allows Finance Minister Michael Noonan to change terms, conditions and maturity dates on AIB’s subordinated bonds, lift restrictions on buybacks and reduce the value of bonds to encourage bondholders to take up a debt buyback.