Bank of Ireland has confirmed plans to make subordinated bondholders help with the cost of recapitalising the institution.
The Bank will offer debt for equity swaps at discounts of up to 90 per cent, which will affect roughly €2.6bn of subordinated liabilities.
It leaves bondholders with two choices.
The first is getting back between 10% and 20% of their value, so if a bondholder has €100 of bonds, they will be offered between €10 and €20.
If bondholders do not accept this offer, the Government will issue what it calls a subordinated liabilities offer which will offer a thousandth of 1% of their bonds.