Impact on debt investors
The following FAQs are based on the Irish Government's document 'Anglo Irish Bank Corporation plc - Nationalisation FAQs' published 03/02/09. This section refers to items 20-22.
I hold an Anglo Tier 1 hybrid instrument. How will the nationalisation affect me?
There should be no impact on your Tier 1 hybrid instrument. Anglo will continue to service its obligations to you under the instrument, i.e. to make coupon payments (subject at all times to the rights of the Board of Anglo to defer such payments) and repay principal at maturity. In relation to perpetual securities, i.e. where there is no maturity date but the debt can be "called" at certain dates, no decision has yet been taken as regards repayment of any outstanding principal at the next call date.
I hold an Anglo bond (other than a Tier 1 hybrid). How will the nationalisation affect me?
There should be no impact on the bond that you hold. Anglo will continue to service its obligations, i.e. to make coupon payments and repay principal at maturity. The bonds will continue to trade.
Anglo's status as a "covered institution" under the Credit Institutions (Financial Support) Scheme 2008 is unaffected by nationalisation and Anglo's "covered liabilities" continue to be guaranteed by the Government until 29 September 2010 inclusive.
Will Anglo be seeking to defer coupon payments under Tier 1 securities?
It is up to the Board of Anglo to decide whether to defer coupon payments on Tier 1 securities. The nationalisation of Anglo has not altered this position. There are currently no plans to defer coupon payments on Anglo's Tier 1 securities.
To view the full pdf 'Anglo Irish Bank Corporation plc - Nationalisation FAQs' on the Department of Finance website, please click here.