Anglo's Subordinated Debt

noodler

Apparently it has €2.4bn worth.

€1.8bn of this will not be covered after tomorrow.

My question is, how did they raise the other €0.6bn?

If it was raised before Sept 2008 then it would be expiring tomorrow surely?

If it was raised under the CIFs then it would also be expiring tomorrow surely?

The ELG doesn't guarantee sub debt so thats that possibility out.

The only conclusion I can come to is that they managed to raise €600m worth of sub debt without any gov guarantee?

noodler

Sorry go hark on but:

The Independent today remarks:

- that all €2.4bn of sub debt will not be guaranteed from Thurs (not my understanding - see above)

- €4bn of senior debt won't be covered from Thurs (seems fair enough)

- €12bn of senior debt will be covered until Dec 31st (now this point I take serious issue with. Any debt covered from Thurs onwards is covered under the ELG. The ELG coveres debt with a maturity of up to 5 years. So, that €12bn is already issued and could have maturity dates anywhere from 2011 - 2015.

Open to correction on any of this but I just think the last point there was poor journalism.

Scarab80

noodler wrote: »

Apparently it has €2.4bn worth.

€1.8bn of this will not be covered after tomorrow.

My question is, how did they raise the other €0.6bn?

If it was raised before Sept 2008 then it would be expiring tomorrow surely?

If it was raised under the CIFs then it would also be expiring tomorrow surely?

The ELG doesn't guarantee sub debt so thats that possibility out.

The only conclusion I can come to is that they managed to raise €600m worth of sub debt without any gov guarantee?

Where are you getting the 1.8bn figure from?

noodler

Scarab80 wrote: »

Where are you getting the 1.8bn figure from?

Times mostly. I have had the figure in my head for the longest time though but I can't lay my hand on a source now that you say it.

EDIT: Going from reading their last results, all I can see is the €2.4bn. I can't see how much is due when or which guarantee it was raised under

http://www.angloirishbank.com/About-Us/Reports/Interim_Report_2010/Interim_Report_2010_PDF.pdf
(p72).

Not that I'd take that as gospel as my interpretation can leave something to be desired.

Scarab80

noodler wrote: »

Times mostly. I have had the figure in my head for the longest time though but I can't lay my hand on a source now that you say it.

EDIT: Going from reading their last results, all I can see is the €2.4bn. I can't see how much is due when or which guarantee it was raised under

http://www.angloirishbank.com/About-Us/Reports/Interim_Report_2010/Interim_Report_2010_PDF.pdf
(p72).

Not that I'd take that as gospel as my interpretation can leave something to be desired.

There was a 1.8bn profit on the repurchase of sub debt by Anglo last year? There could be a similar profit on the repurchase of the remaining sub debt - 2.4bn debt trading about 20c - 25c? Or it could be that 0.6bn sub debt is the amount required for the new Anglo capital structure so they can offload 1.8bn of it?

noodler

Again, I am not saying the Times is the source for all truth but they do mention explicitly in two different articles in today's paper that €2.4bn is outstanding but only €1.8bn is going to be unguaranteed.

Pretending they are right for a moment, I just couldn't see how the other €0.6bn was raised.

Scarab80

noodler wrote: »

Again, I am not saying the Times is the source for all truth but they do mention explicitly in two different articles in today's paper that €2.4bn is outstanding but only €1.8bn is going to be unguaranteed.

Pretending they are right for a moment, I just couldn't see how the other €0.6bn was raised.

Link?

All i can see is....

About €2.4 billion of subordinated Anglo debt and €4.2 billion of its senior bonds will no longer be guaranteed from the end of this week.

Anglo accounts show sub debt at March 2009 at 4.9bn, they sold off 2.5bn for 600m last year, o/s at Dec 2009 and June 2010 - 2.4bn

noodler

http://www.irishtimes.com/newspaper/frontpage/2010/0928/1224279829301.html

http://www.irishtimes.com/newspaper/finance/2010/0928/1224279828175.html

Scarab80

noodler wrote: »

http://www.irishtimes.com/newspaper/frontpage/2010/0928/1224279829301.html

http://www.irishtimes.com/newspaper/finance/2010/0928/1224279828175.html

Most likely to be dodgy reporting. You can see on the Anglo accounts that no new subordinated bonds have been issued, the shortest term sub debt after nationalisation was 2014 so no need to rollover.

If the times do know something I would expect that it relates to the new Anglo capital structure which may require some sub debt to meet capital structure requirements. This debt will not be guaranteed but they may not seek a buyback on it, probably some perpetual debt and longer term dated debt.

noodler

I see what you are saying.

It does mention that €1.8bn is dated, which implies the other €0.6bn was raised during the guarantee (but if this was the case that it would have to have been raised by the CIFS which expires on Thurs or without any guarantee at all as the ELG doesn't help there).

Anyway, thanks for your input on the matter.

Scarab80

noodler wrote: »

I see what you are saying.

It does mention that €1.8bn is dated, which implies the other €0.6bn was raised during the guarantee (but if this was the case that it would have to have been raised by the CIFS which expires on Thurs or without any guarantee at all as the ELG doesn't help there).

Anyway, thanks for your input on the matter.

OK got it now. 1.8bn is the amount of dated sub debt left in Anglo, this is going to be bought back at a discount.

The remaining 600m is perpetual debt, like equity it does not have a capital repayment date and just pays a coupon annually. This debt was never covered in the CIFS guarantee hence only 1.8bn of the 2.4bn is coming out of guarantee, the rest was never guaranteed. Ba dum tish!

soddy1979

You can see the subordinated capital structure here on page 56.

http://online.hemscottir.com/ir/ckl/ir_2010/ir.jsp

noodler

Scarab80 wrote: »

OK got it now. 1.8bn is the amount of dated sub debt left in Anglo, this is going to be bought back at a discount.

The remaining 600m is perpetual debt, like equity it does not have a capital repayment date and just pays a coupon annually. This debt was never covered in the CIFS guarantee hence only 1.8bn of the 2.4bn is coming out of guarantee, the rest was never guaranteed. Ba dum tish!

Ah okay. I must find that in the results. Thanks again

soddy1979 wrote: »

You can see the subordinated capital structure here on page 56.

http://online.hemscottir.com/ir/ckl/ir_2010/ir.jsp

Hello Soddy, I am using the PDF version, have you got a page in the Anglo Results or were you just generally linking?

soddy1979

I'm using the interactive version but I think it is note 28 to the statement of financial position. I'm looking at the interim results. Not sure what page it is on the pdf.

noodler

[IMG]file:///C:/DOCUME%7E1/.../LOCALS%7E1/Temp/moz-screenshot-3.png[/IMG][IMG]file:///C:/DOCUME%7E1/.../LOCALS%7E1/Temp/moz-screenshot-4.png[/IMG]I think I see it on page 56 (section 28 like you said).

[IMG]file:///C:/DOCUME%7E1/.../LOCALS%7E1/Temp/moz-screenshot-5.png[/IMG][IMG]file:///C:/DOCUME%7E1/.../LOCALS%7E1/Temp/moz-screenshot-6.png[/IMG][IMG]file:///C:/DOCUME%7E1/.../LOCALS%7E1/Temp/moz-screenshot-7.png[/IMG]I add up all the undated stuff and come up with a figure of around €705m.

I would need help in the interpretation though.

Scarab80

noodler wrote: »

[IMG]file:///C:/DOCUME%7E1/.../LOCALS%7E1/Temp/moz-screenshot-3.png[/IMG][IMG]file:///C:/DOCUME%7E1/.../LOCALS%7E1/Temp/moz-screenshot-4.png[/IMG]I think I see it on page 56 (section 28 like you said).

[IMG]file:///C:/DOCUME%7E1/.../LOCALS%7E1/Temp/moz-screenshot-5.png[/IMG][IMG]file:///C:/DOCUME%7E1/.../LOCALS%7E1/Temp/moz-screenshot-6.png[/IMG][IMG]file:///C:/DOCUME%7E1/.../LOCALS%7E1/Temp/moz-screenshot-7.png[/IMG]I add up all the undated stuff and come up with a figure of around €705m.

I would need help in the interpretation though.

Upload the files here and link from there, boards doesn't host images.

noodler

Jesus what a mess!

Here is what I meant to say!

"I think I see it on page 56 (section 28 like you said).

I add up all the undated stuff and come up with a figure of around €705m.

I would need help in the interpretation though."


p56 here
http://www.angloirishbank.com/About-Us/Reports/Interim_Report_2010/Interim_Report_2010_PDF.pdf

noodler

Actually, forget it.

I think I was just going blind for a moment: I think it is fairly evident that the top table is the €1.8bn and the bottom table is the €0.6bn

Although the actual figures to me look like:
- Dated: €1.742bn
- Undated €0.705bn

soddy1979

You can also see what's covered under the ELG here:

http://www.ntma.ie/ELGScheme/GuaranteedLiabilitiesbyInstitution.php