Thanks to Golem XIV for his help on this:
Irish Bank Default Rumour - UPDATE
The plot thickens.
This came in yesterday from Reuters and seems to have received almost no notice at all. Which I find strange as it looks to me that it confirms WhistleblowerIRL's post.
WhistleblowerIRL said he was told one of the last two major Irish Banks to have not yet crashed was about to be nationalized. In my mind that had to be Bank of Ireland. The Bank of Ireland did spend an unusual amount of time on my blog yesterday. But nothing at all in the main stream press. Then late yesterday Reuters says Bank of Ireland had defaulted on payment and was trying to buy back 2.6 billion in Tier one and two subordinated debt.
For those who don't know the ISDA is the body which sets the standards for all swaps deals other than some private over the counter deals done direct between buyer and seller. Any market based deal adheres to the ISDA standards. So the ISDA know what they are talking about. This is a deal they are fully aware of and not in any way just a market rumour.
A "restructuring credit event" is what Greece is trying to avoid. It is, as the article says a default on debt. And this is a LARGE default. 2.6 BILLIONS large and a 90%!! loss for the bond holders. And this was 'earlier' this month.
Now either I have completely misunderstood what this is or I have to ask why this wasn't news back then or even today? Weeks ago, Ireland's last standing bank tried to buy back at a 90% discount (90% loss from face value for those holding that debt) and no one said a word?
If this is what it seems, then this must be the rumour WhistleblowerIRL had heard. I will try to talk to him later today.
Bank of Ireland has defaulted on 2.6 billion of bonds and is trying to buy them back at a huge discount. Why it's trying to buy them back is then the question and who does it help to do so?
Whoever it helps in the long run, bank or bond holders, the fact is Bank of Ireland is valuing a large chunk of its own Tier one and two subordinated debt as having lost 90% of its original value!
I think the Euro authorities will need to get that EFSF (European Financial Stability Facility) - the European IMF and Plunge Protection Team rolled in to one - fully funded and looking West to Ireland not just East and South to Greece, Portugal, Spain and Italy.
This came in yesterday from Reuters and seems to have received almost no notice at all. Which I find strange as it looks to me that it confirms WhistleblowerIRL's post.
DUBLIN, July 22 | Fri Jul 22, 2011 6:48am EDT
(Reuters) - The International Swaps and Derivatives Association (ISDA) on Friday set July 28 for an auction to settle credit default swaps (CDS) in relation to Bank of Ireland after ruling that the bank had suffered a restructuring credit event.
The ISDA said a restructuring credit event occurred after Bank of Ireland closed an offer to buy back about 2.6 billion euros of Tier 1 and Tier 2 subordinated debt at a discount of up to 90 percent earlier this month.
A credit event is financial industry jargon for default on payment, breach of bond covenants or other event that casts doubt on an issuer's ability to service its debt. (Reporting by Conor Humphries)http://www.reuters.com/article/2011/07/22/bankofireland-idUSWLB837520110722
For those who don't know the ISDA is the body which sets the standards for all swaps deals other than some private over the counter deals done direct between buyer and seller. Any market based deal adheres to the ISDA standards. So the ISDA know what they are talking about. This is a deal they are fully aware of and not in any way just a market rumour.
A "restructuring credit event" is what Greece is trying to avoid. It is, as the article says a default on debt. And this is a LARGE default. 2.6 BILLIONS large and a 90%!! loss for the bond holders. And this was 'earlier' this month.
Now either I have completely misunderstood what this is or I have to ask why this wasn't news back then or even today? Weeks ago, Ireland's last standing bank tried to buy back at a 90% discount (90% loss from face value for those holding that debt) and no one said a word?
If this is what it seems, then this must be the rumour WhistleblowerIRL had heard. I will try to talk to him later today.
Bank of Ireland has defaulted on 2.6 billion of bonds and is trying to buy them back at a huge discount. Why it's trying to buy them back is then the question and who does it help to do so?
Whoever it helps in the long run, bank or bond holders, the fact is Bank of Ireland is valuing a large chunk of its own Tier one and two subordinated debt as having lost 90% of its original value!
I think the Euro authorities will need to get that EFSF (European Financial Stability Facility) - the European IMF and Plunge Protection Team rolled in to one - fully funded and looking West to Ireland not just East and South to Greece, Portugal, Spain and Italy.
