Tag Archives: Allied Irish Bank

Belgium Joins The PIIGS: And Then They Were Six

Those hoping for a euphoric reaction to the weekend bailout of Ireland must have been disappointed today. Even Italy, which many had started to regard as no longer a PIIG, matched its record wide. Contagion fears have certainly not been assuaged; if anything, they have become more heightened.

“And the rate at which Belgium is widening means that we may have to find a new derogatory acronym.”

Gavan Nolan


The Markit iTraxx SovX Western Europe index surged to another record wide and the two Iberian sovereigns broke the record levels that they hit last week.

Ireland’s funding needs for the next two years seem to have been settled by the bailout, albeit at a less than generous average rate of 5.8%.

And the fact that bank senior bondholders won’t be sharing the burden before 2013 has been welcomed by the markets, if not by the Irish people.

But the political risk remains ahead of the December 7 budget, Gavan Nolan at Markit Credit Research points out.

“The consensus seems to be that the coalition government will manage to get it through, but there is no guarantee that the incoming government early next year will not want to renegotiate the terms of the bailout.”

The rescue of Ireland by the EU/IMF was more or less priced into Irish spreads, so the widening was concentrated in the other peripherals (bar Greece).

“Speculation that Portugal is next in line has intensified and has now spilled over into sovereigns – such as Belgium – that were perceived as relatively safe a few months ago,” Nolan Writes.

Core euro zone countries have also widened significantly.

Banks lost the gains they made this morning, the sovereign debt concerns outweighing the relief from the lack of “burden sharing” for Irish bank senior bondholders.

AIB and Bank of Ireland senior CDS, unsurprisingly, outperformed the rest of the sector, though liquidity remains poor on these names.

(Markit Liquidity Scores of 3 and 4 respectively).

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  • Markit iTraxx Europe 115bp (+5), Markit iTraxx Crossover 515.5bp (+21.5)
  • Markit iTraxx SovX Western Europe 198bp (+10.5)
  • Markit iTraxx Senior Financials 166bp (+1.5)
  • Sovereigns – Greece 960bp (-4), Spain 353p (+28), Portugal 545bp (+43), Italy 249bp (+34), Ireland 615bp (+15), Belgium 188bp (+29)

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Filed under International Econnomic Politics

The Precious Irish Bondholders – Here's The Full List

The players in the European credit market are scared senseless by the proposal of channeling some of the losses in the financial sector over to them,  a so-called “Bail-In”.  The element of haircut for bondholders is particular relevant for Ireland who’s banking industry is the main problem. Well, here’s some examples of poor Irish bondholders: Goldman Sachs, HSBC, Deutsche Bank (Asset Management), Alianz, AXA, BNP Paribas, Royal Bank of Scotland, Barclays, Credit Suisse, just to mention a few… You’ll find the full list below.

“Every child in Ireland is being bequeathed a huge debt at birth to protect the interests of foreign, mainly German, bondholders – why?”

Guy Fawkes‘ Blog

BIG BANKERS: Lloyd Blankfein, Kenneth Irvine Chenault, Kenneth Lewis and Edward Yingling.

Anglo-Irish Bank do hardly represent a serious systemic risk to the Irish economy, certainly not to the same degree as AIB or the Bank of Ireland. And if it had been allowed to follow Lehman Brothers,  the shareholders and bondholders would probably have been the only ones to lose money.  However, the Irish government is seeking a way to protect their precious bondholders.

“Every child in Ireland is being bequeathed a huge debt at birth to protect the interests of foreign, mainly German, bondholders – why?”

This interesting question is raised in a recent post at the Guy Fawkes’ Blog.

The Irish state stepped in and nationalised a bank that was basically run by “crooks lending to property speculators,” the blogger writes.

Pointing out that the Irish people are taking the losses that rightfully should have been on the shoulders of the bondholders.

Once upon a time it sometimes happened that  a bond issuer defaulted. And it was seemed as a natural part of the risks investors take.

Yeah, well, times have obviously changed.

One can only wonder why Dublin’s political establishment is so keen to protect foreign investors at the expense of future generations.

The list below of foreign Anglo-Irish bondholders was originally obtained by an Irish bond trader, updated per November 15, and first published at the Guy Fawkes’ Blog.

These are the people whom Dublin’s politicians really seem to care so deeply about – I guess the names are somewhat familiar?


(h/t: Guy Fawkes’ blog)

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Filed under International Econnomic Politics, National Economic Politics