Court decision on AIB bondholders due today

The High Court is expected to decide today whether AIB is obliged to meet an interest payment on junior bonds that are the subject of a legal challenge.

The bond is held by US based investment firm Aurelius Capital which is opposing a move by the Government to impose losses on junior bondholders at the bank.

Aurelius is challenging a High Court order from April that pushes junior bondholders into selling bonds back to AIB for as little as 10% of their face value.

The idea is to raise capital and ease the load on the Irish taxpayer of bailing out the banks.

If Aurelius wins its case, interest on the bonds falls due tomorrow.

AIB has parked the money, £22m (€24.7m), in Citibank, but is due to ask the court today to suspend any interest obligation until this legal challenge is fully decided.