Noonan secures High Court order against sub-ordinated AIB bondholders

Minister for Finance Michael Noonan has secured a High Court order burning the sub-ordinated bondholders at AIB.

Mr Noonan has welcomed the move, which he said would ensure that some of the taxpayers’ burden in recapitalising the bank is shared.

A similar move is planned for Bank of Ireland and Irish Life and Permanent.

AIB currently owes €2.5bn on subordinated bonds.

This evening, following a court ruling, the subordinated bondholders are to share some of the taxpayers' burden of bailing out the bank.

New terms are to be imposed on their securities: for example, bonds that were due to mature in 2017 won't now be realised until 2035.

It is hoped that these less favourable terms will tempt subordinated bondholders to sell the securities back to AIB at a significant discount, and allow the bank to raise capital.