Bank of Ireland Won't Pay Coupons on Notes

Barname

wow, this is just in...

“The EC has indicated that in line with its policy and pending its assessment of the restructuring plan that the bank should not make coupon payments on its Tier 1 and Tier 2 capital instruments unless under a binding legal obligation to do so,”

The suspension of the coupon payments means the bank won’t be able to pay dividends for a year. If Bank of Ireland can’t pay the 250 million-euro dividend it’s due to make to the government for its investment, the payment may be made in shares.

Taxpayer hello. Board goodbye.

http://online.wsj.com/article/BT-CO-20100119-702229.html?mod=WSJ_latestheadlines

Barname

The effect of this decision by the Bank will be to trigger the "Dividend Stopper" provisions of the LP 2 Securities and LP 3 Securities. While these "Dividend Stoppers" remain in force, the Bank will be precluded, for a period of one calendar year from and including 1 and 4 February 2010 respectively, from declaring and paying any distribution or dividend on its "Junior Share Capital" and on any "Parity Security", which currently comprises the Bank's ordinary capital stock ("the Ordinary Stock"), the outstanding non-cumulative Euro and Sterling Preference Stock (currently 3,026,598 units of €1.27 and 1,876,090 units of £1.00), the Bank of Ireland UK Holdings plc €600m 7.4% Guaranteed Step-up Callable Perpetual Preferred Securities, the Bank of Ireland UK Holdings plc Stg£350m 6.25% Guaranteed Callable Perpetual Preferred Securities, the BOI Capital Funding (No.1) LP €600m Fixed Rate/Variable Rate Guaranteed Non-voting Non-cumulative Perpetual Preferred Securities and the BOI Capital Funding (No.4) LP £500m Fixed Rate/Variable Rate Guaranteed Non-voting Non-cumulative Perpetual Preferred Securities and the Irish Government €3.5bn preference stock ("the 2009 Preference Stock") issued to the National Pensions Reserve Fund Commission of Ireland ("NPRFC").

http://www.bankofireland.com/press_room/latest_releases/2010/General_Content_1000557.html

from Bank of Ireland, the Dep of Fin have nothing yet.... you would have thought they were aware/prepped???

nesf

So perpetuals with provisions in them allowing the bank not to pay the coupon are not going to receive coupon payments for a while. What's so controversial about that? It's not like the bank is defaulting on bonds that require them to pay the coupon every month.

Barname

nesf wrote: »

So perpetuals with provisions in them allowing the bank not to pay the coupon are not going to receive coupon payments for a while. What's so controversial about that? It's not like the bank is defaulting on bonds that require them to pay the coupon every month.

Perhaps you need to brush up on the fine print of the Banks Recapitalisation Package then?

nesf

Barname wrote: »

Perhaps you need to brush up on the fine print of the Banks Recapitalisation Package then?

How would banks increasing their need for State support while they are reliant on State funding be a good deal for Taxpayers? What we'd get in one hand we'd have to give back with the other.

Barname

nesf wrote: »

How would banks increasing their need for State support while they are reliant on State funding be a good deal for Taxpayers? What we'd get in one hand we'd have to give back with the other.

who said it was good for the taxpayer?

Slippers

He's saying 'How would the bank paying the coupons be good for taxpayers?' i.e. 'How is this news that the bank will not be paying the coupons bad for taxpayers?'.

Barname

Slippers wrote: »

He's saying 'How would the bank paying the coupons be good for taxpayers?' i.e. 'How is this news that the bank will not be paying the coupons bad for taxpayers?'.

lmao, no, nesf didnt

nesf first said:

So perpetuals with provisions in them allowing the bank not to pay the coupon are not going to receive coupon payments for a while. What's so controversial about that? It's not like the bank is defaulting on bonds that require them to pay the coupon every month.

now. I will await nesf's explanation of the above quoted before progressing...

Slippers

Unless I am mistaken

nesf wrote: »

...increasing their need for State support...

means paying out money that they need to help them stay solvent, either in coupons or dividends, and

nesf wrote: »

What we'd get in one hand we'd have to give back with the other.

means his view is that what the state would get in a dividend it would have to give back in an increased recapitalisation because the bank would be that much more short of money.

Barname

It would be nice of nesf to clarify post 3 in this thread

nesf

Slippers is correct. Barname is just pissed off about a ban he got from Politics recently.

Flamed Diving

nesf wrote: »

Slippers is correct. Barname is just pissed off about a ban he got from Politics recently.

L:DL

Barname

nesf wrote: »

Slippers is correct. Barname is just pissed off about a ban he got from Politics recently.

http://boards.ie/vbulletin/showthread.php?p=64115224#post64115224

And you call yourself a moderator ?

(btw - you still have not explained your inane post No 3)

Time Magazine

Gents: please settle this round the back after school and not here, thanks.