Greece is on the cusp of a disorderly default and Portuguese bonds are tanking as investors price in sharp haircuts.

IRELAND, which saw its financial system come closer to collapse than that of any euro nation, may now entice investors back to its bank bonds.

DEPARTMENT of Finance officials are engineering a manoeuvre that may make the difference between default and financial survival.

BANK of Ireland said the state will reduce its shareholding to 15.1% after the lender’s rights offering this week, making it the only one of the country’s six largest lenders to escape Government control.

MOODY’S Investors Service says it differentiates significantly between European periphery countries, suggesting it may not imminently cut Ireland’s rating to junk in line with Portugal and Greece.

A JUNIOR bondholder in AIB withdrew its challenge to a state-backed burden-sharing scheme yesterday as the Government forged ahead with plans to recapitalise the state-owned lender.

CIT Economics Lecturer Tom O’Connor believes the IMF/EU deal “should be cast aside”.

IRISH banks’ borrowings from the European Central Bank and the Central Bank of Ireland fell by 12% in April, primarily due to the country’s debt agency temporarily placing deposits with some lenders.

IRELAND’S credit rating has been cut five notches by Moody’s on the basis that the austerity measures could dampen economic growth and domestic demand.

ALLIED Irish Banks and Bank of Ireland are expected to put the squeeze on the holders of €9 billion of subordinated debt to help part-fund an extra €7.5bn in capital the Central Bank wants the country’s two biggest banks to put in place.

NATIONALISED Anglo Irish Bank’s chairman Alan Dukes has ruled out talking to a dissident group of bondholders and called on them to accept a deeply discounted €1.6 billion debt exchange.

ANGLO Irish Bank Corp offered to exchange €1.6 billion of subordinated debt at a discount, paying in new bonds at a rate of 20 cent on the euro as the nationalised lender seeks to generate capital.

London: Ireland may sell as much as €8 billion of bonds in the rest of the year, according to Glas Securities, which specialises in fixed-income markets.

THE sale by AIB of its Polish unit Bank Zachodni WBK for €2.5 billion has not guaranteed it will avoid falling under state control.

IRISH bank shares recovered from heavy early morning losses when investors panicked following a credit rating downgrade.

AIB may find it difficult to pass European stress tests, as its capital raising won’t be finished before results are due, says Glas Securities, which specialises in fixed-income markets.

IRISH banks expect to be informed shortly by the Government how much capital they will need to hold as operating financial institutions.