Bank of Ireland Seeks Losses From Bond Group Spared in June
www.bloomberg.com/news/2011-08-24/...group-spared-in-june.html
Bank of Ireland Plc is seeking to impose a discount of about 60 percent on a group of junior bondholders spared from an earlier offer two months ago.
The Dublin-based lender on June 28 scrapped an offer to swap 75 million pounds ($126.7 million) of 13.375 percent perpetual unsecured bonds for cash or equity after some owners of the securities had “procedural difficulties.” The bank offered to pay 40.20 pounds for every 100 pounds owned, it said in a statement today.
The lender withdrew its original offer two months ago as it faced a court challenge from an investor contesting the exchange of the securities, originally sold by the Bristol & West Building Society in 1991. They became obligations of Ireland’s biggest bank when it bought the former mutual lender for 600 million pounds in 1997. The bank said June 28 it had resolved the legal challenge.
Some holders of the notes didn’t hold the minimum amount required to swap them for new securities rather than cash, according to Mark Taber, who coordinated the bondholder campaign against Bank of Ireland. The initial offer applied an 80 percent discount on bonds exchanged for cash, and 60 percent for those swapped for equity.
The new offer doesn’t have a debt-for-equity alternative.
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