Watch market volatility from EUR crosses, may touch off sharp pre/post open stock falls: EURO markets
Irish Times 26 Oct 2010
"ANGLO IRISH Bank’s offer to swap its subordinated debt for new bonds is “tantamount to a default” because of the penalties inflicted on investors who refuse to take part, according to the Canadian credit ratings agency, DBRS.
The bank’s non-senior ratings will be reduced by one notch step to D for “Default” after Anglo completes the exchange, the Toronto-based agency said.
The nationalised bank is offering investors 20 cents on the euro in new bonds on dated subordinated debt and 1 cent for every €1,000 face amount for those declining to take part.
“DBRS views the proposed exchange as offering bondholders limited options,” the agency said.
“Should the bondholders reject the proposed exchange, at an 80 per cent discount on tendered notes, they face the risk of significant burden-sharing.”
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