IMF backs plan to burn bondholders

THE Government will seek to impose significant losses on the senior unguaranteed bondholders in Anglo Irish Bank and Irish Nationwide Building Society, Finance Minister Michael Noonan has said.

However, his statement and the near-collapse of the Greek government delivered a blow to investor confidence sending the cost of insuring Greek, Irish and Portuguese debt higher amid fears of a default.

Mr Noonan made his announcement about the €3.5 billion of senior, unsecured, unguaranteed Anglo and INBS bonds following a meeting with the IMF, which he said supported the strategy.