AIB secures ruling guarding against challenges

ALLIED Irish Banks has secured a court ruling aimed at guarding against legal challenges in other EU states to the bank’s decision not to make a £21 million coupon payment to junior bondholders.

That coupon payment was due to be made last Saturday, but Mr Justice John Cooke last Friday granted an application by AIB, supported by the State, permitting the funds instead to be lodged in court pending the outcome of a challenge by a Cayman Islands investment firm to an order secured by the Minister for Finance last April.

That Subordinated Liabilities Order, if upheld by the court, will permit AIB not to pay the coupon at all.