Mr McGrath said it was wrong that Ireland was repaying in full unsecured, unguaranteed bondholders when Greece was getting massive write downs on its debt.
He called on Mr Kenny to contact the incoming president of the European Central Bank (ECB), Mario Draghi, and make a “last-ditch effort” to stop the repayment.
Bondholders are typically institutions which lend money to countries in return for regular interest payments and the repayment of the principal at a fixed date.
The identities of the Anglo bondholders are unknown — such bonds are frequently traded. But €715m is due to be repaid tomorrow.
The decision has led to criticism: the Government has pumped €29bn of taxpayers’ money into Anglo, which has been merged with Irish Nationwide and is now called the Irish Bank Resolution Corporation.
Earlier this year, Finance Minister Michael Noonan signalled that he would seek to impose losses on unguaranteed, unsecured senior bondholders in Anglo, but was rebuffed by the ECB.
However, ECB head Jean-Claude Trichet is stepping down today and being replaced by Mr Draghi.
“There is a fundamental issue of equity in the EU at stake here,” Mr McGrath said. “Greece has been granted a haircut of 50% of its sovereign debt held by European banks while the ECB is attempting to force Ireland to repay in full unsecured, unguaranteed bonds owed by failed Irish banks currently being wound up.
“Many reputable economists believe the bond should not be redeemed at all. Applying a 50% discount on the bond would save Ireland more than €350m.”
The Government defended the decision to repay the bond, saying Ireland’s credibility and creditworthiness were at stake. Mr Noonan said the repayment will come from Anglo’s resources rather than being a “charge on the Irish taxpayer”.
Mr McGrath said such an argument was “insulting”, given the billions injected into the bank by taxpayers.
“The Government’s efforts in recent days to claim that Anglo would be repaying the €715m bond out of its own resources were nothing short of insulting to the intelligence of the Irish people,” Mr McGrath said.
“This is the last opportunity for the Taoiseach to act decisively. He needs to personally make contact with Mr Draghi and impress upon him the need for Ireland to make substantial savings on the outstanding bank debt owed by Anglo/Irish Nationwide. Otherwise, it will make the task of convincing the Irish people of the need for the measures in the upcoming budgets all the more difficult.”