British pensioners threaten challenge to BoI capital plan

BANK OF IRELAND has defended the burden-sharing element of its capital raising plan in the face of a fresh legal challenge from British-based bondholders over the matter.

A group of up to 2,000 British pensioners are threatening legal action over the bank’s plan to buy back the debt they hold at a heavily discounted rate. The case refers to bonds issued by the Bristol & West Building Society in the early 1990s before it was acquired by BoI.

As part of BoI’s €5.2 billion capital raising effort, approximately €2.6bn is set to come from buying back discounted debt from junior bondholders. In the case of the Bristol & West pensioners, 20p is being offered for every pound they have invested in bonds, with those voting against the bank’s “liability management exercise” only getting 1p for every £1,000 invested.