BoI to rethink swap for Bristol & West 'pibs'
Wednesday 29 June 2011
The Bank of Ireland (BoI) has cancelled plans that could have seen savers holding £75m in bonds issued by the old Bristol & West building society lose at least 80 per cent of the face value of their holdings.
The BoI had asked holders of the so-called permanent interest bearing shares (pibs) issued by Bristol & West, which it bought in 1997, to hand them over for 20 per cent of their face value or risk losing up to 99 per cent under a restructuring connected to the bank's bailout by the Irish government. Many of the investors in the pibs are pensioners who look to the bonds' 13.375 per cent interest rate for income.
But yesterday, the state-rescued lender said it was terminating the move with immediate effect, and that it would come up with a new offer. "In so doing, the bank will seek to address the unique difficulties that have been highlighted," it said.
Separately, BoI also confirmed that it had come to a resolution in a legal action connected to the now-terminated proposal. In a test case for the estimated 2,000 British pensioners affected by the move, pib-holder Albert Kepmster, 73, was taking the BoI to the High Court over the restructuring, with a hearing due today. But yesterday, the BoI said that "proceedings have been resolved to the parties' mutual satisfaction".
The restructuring was part ofan attempt to raise the €4.2bn in additional reserves to boost the capital cushion, or core Tier 1 capital ratio, that the BoI- needs to find by the end of July following stress tests in March.
It has already raised around half of the extra funds needed from junior bondholders who took part in a debt swap offer. The BoI, which is part-owned by the Irish taxpayer, is also launching a government-backed rights issue to raise the balance of the required capital.
- 1 What happens to your body when you give up sugar?
- 2 Drugs Live cannabis trial: Hash is less harmful than any other drug, expert claims
- 3 Turkish Airlines flight TK 726 crash-lands on Nepal runway amid dense fog
- 4 Penis size: Study revealing 'what's normal' sends international media into meltdown
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
Turkish Airlines flight TK 726 crash-lands on Nepal runway amid dense fog
Ayesha Ali death: Mother and her girlfriend found guilty of manslaughter of eight-year-old
George Clooney and Amal fail to get special treatment at New York restaurant
Cindy Crawford 'un-PhotoShopped' viral Marie Claire image was doctored, claims photographer
'A girl is more responsible for rape than a boy': The statement that shocked the world... except India
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
iJobs Money & Business
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...
£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...