Obbligazioni bancarie Banche irlandesi: newsflow, ratings, bonds. Il fronte irlandese dell'Euro.

[tommy271]

Ireland's Banking Crisis: Ode On A Grecian Turn

By Nico Isaac
Thu, 09 Sep 2010 11:00:00 ET

At the start of this year, the mainstream financial experts divided Europe's economy into two very different "animals": The PIGS (Portugal, Italy Greece and Spain) were sent off to the market to get slaughtered. But the "Celtic Tiger" of Ireland bared its razor-sharp teeth in a show of fierce autonomy and austerity.
On February 16, 2010, Ireland's Minister of Finance formalized the distinction with this public announcement:
"Ireland is not Greece... This has been reflected in the Irish spreads which have remained relatively steady over the recent crisis. There is a broad new consensus that the economy will bottom out by mid year." (Irish Times)
In the months that followed, the "relative steadiness" in Irish bond spreads continued. Even as the sovereign debt crisis made mince meat out of Spain and Greece's bond markets, Ireland's credit default swaps continued to hug 1.6%-1.75%. The dichotomy seemed s strong that by April, Ireland's financial officials felt surefooted enough to loosen its draconian grip on monetary policy (i.e., cumulative budget cuts totaling 5% of GDP in 2009). That same month, the government approved an initial $34 billion bailout of Anglo Irish Bank Corp. and Irish Nationwide Building Society.
Unlike the open-ended bailouts of the West, however, Ireland's leaders warned its financial institutions not to get too cozy in their stimulus snuggie. In the words of one higher up, "There will be no second act in the recapitalization of Ireland's banks..." (April 1 Irish Times)
Flash ahead to today. On September 7, 2010 the SECOND ACT that would not be, was. On that day, the Irish government announced it would extend bank assistance until the end of this year, while Irish Bank Corp. revealed that it needs an additional $32 billion.
It gets worse. The once steady Irish spreads are no longer so steady. Ireland's credit default swaps now stand at an all-time record high of 402.5 basis points, while the spread between Irish 10-year bonds and the equivalent German Bunds is also at an all-time record of 379 basis points. And, according to one news source, "sheer panic" surrounded the Anglo Irish Bank crisis as investors rapidly woke up to the fact that Ireland was never immune to Europe's debt contagion.
For long-time EWI subscribers, this comes as no surprise. In the June 2010 European Financial Forecasteditor Brian Whitmer issued this bold alert:
"Today the crisis has begun with the big banks and has seeped into the most marginal sovereign nations. It won't stop there. The ugly truth is that the only thing separating these countries from Greece is the fragile confidence that they are, indeed, distinct. That confidence will erode as markets descend."
Brian Whitmer points out another compelling similarity between Ireland and Greece in the latest, September 2010 European Financial Forecast: This close-up of Ireland's ISEQ Index plotted above one-year credit default swaps:

"Irish swaps began climbing out of their lows near 100 basis points in March 2010, more than one month before the ISEQ's high on April 26. We point this out because the same credit deterioration preceded the top in Greek equities nearly one year ago. Greek swaps bottomed near 65 BP's in late September 2009, one month before the Athens market reached its high on October 15, 2009."

(Elliottwave.com)

 

[davide8]

da irish Independent

The Irish Independent also reports that the previous lending record of Anglo Irish Bank was the key reason the Government and the EU Commission shot down the 'good bank/bad bank' model proposed by the bank's senior management.

Sources familiar with the talks involving the EU, the Department of Finance, the Central Bank, Anglo and the NTMA told the Irish Independent that staff previously associated with lending decisions at the bank could have taken key roles in the new bank and this made key players nervous.

The good bank/bad bank idea would have involved putting between €2bn and €3bn of fresh capital into a new bank and this would have been lent into new sectors by the bank's existing staff. Property would have been a large part of the lending.

At several meetings, government representatives expressed concern about the past record of staff members, although they expressed satisfaction with the recent work done by the Mike Aynsley-led management team.

Baulked

Government representatives are believed to have baulked at the idea of Anglo lending such large sums into segments of the market previously ignored by the bank.

The EU Commission retained its opposition to this idea right to very end. Instead, the bank will be split in two -- a savings bank and an asset recovery bank -- and both will have to be capitalised with funds decided by the Financial Regulator Matthew Elderfield.

Yesterday, chairman of Anglo Alan Dukes admitted there was no certainty the capital required for the two new banks plus funds already committed would not exceed €25bn.

The two banks will be separate, but the savings bank will end up funding the recovery bank. This will be done by a bond that could be as big as €45bn. A source described the arrangement as like one bank branch lending to another. The new savings bank will be able to gather deposits from a range of markets including European countries and the Isle of Man.

This savings bank is unlikely to need much capital, but the recovery bank will need a lot of regulatory capital, with some sources suggesting it may need 10pc of assets in equity capital to cover for the inherently risky nature of the loans.

The new Anglo Irish recovery bank, which will take €38bn of loans, is getting a banking licence to prevent loans being added to the budget deficit, the Irish Independent has learned.

Under the original good bank/bad bank idea proposed by Anglo's management, the entity taking the loans was not going to be a bank, but a simple commercial company, without a banking licence.

But this could have meant the company's loans would have been added to the general government balance (GGB), the European version of the annual budget deficit.

 

[Imark]

da irish Independent

The Irish Independent also reports that the previous lending record of Anglo Irish Bank was the key reason the Government and the EU Commission shot down the 'good bank/bad bank' model proposed by the bank's senior management.

Sources familiar with the talks involving the EU, the Department of Finance, the Central Bank, Anglo and the NTMA told the Irish Independent that staff previously associated with lending decisions at the bank could have taken key roles in the new bank and this made key players nervous.

The good bank/bad bank idea would have involved putting between €2bn and €3bn of fresh capital into a new bank and this would have been lent into new sectors by the bank's existing staff. Property would have been a large part of the lending.

At several meetings, government representatives expressed concern about the past record of staff members, although they expressed satisfaction with the recent work done by the Mike Aynsley-led management team.

Baulked

Government representatives are believed to have baulked at the idea of Anglo lending such large sums into segments of the market previously ignored by the bank.

The EU Commission retained its opposition to this idea right to very end. Instead, the bank will be split in two -- a savings bank and an asset recovery bank -- and both will have to be capitalised with funds decided by the Financial Regulator Matthew Elderfield.

Yesterday, chairman of Anglo Alan Dukes admitted there was no certainty the capital required for the two new banks plus funds already committed would not exceed €25bn.

The two banks will be separate, but the savings bank will end up funding the recovery bank. This will be done by a bond that could be as big as €45bn. A source described the arrangement as like one bank branch lending to another. The new savings bank will be able to gather deposits from a range of markets including European countries and the Isle of Man.

This savings bank is unlikely to need much capital, but the recovery bank will need a lot of regulatory capital, with some sources suggesting it may need 10pc of assets in equity capital to cover for the inherently risky nature of the loans.

The new Anglo Irish recovery bank, which will take €38bn of loans, is getting a banking licence to prevent loans being added to the budget deficit, the Irish Independent has learned.

Under the original good bank/bad bank idea proposed by Anglo's management, the entity taking the loans was not going to be a bank, but a simple commercial company, without a banking licence.

But this could have meant the company's loans would have been added to the general government balance (GGB), the European version of the annual budget deficit.

Davide, che idea ti sei fatto di questo meccanismo ?

Sembra che sostanzialmente l'obiettivo sia quello di garantire una netta separazione fra bilancio dello stato e bilancio della bad bank, ed inoltre di evitare che nel breve termine l'Irlanda sia chiamata ad iniettare altri 2-3 mld euro in tale banca, a prescindere dalle considerazioni sull'operato pregresso del management di Anglo.

 

[ferdo]

Anglo Irish ha venduto la controllata polacca

 

[davide8]

Mark, concordo pienamente. Aggiungerei che, se la banca intera fosse stata posta in graduale wind down, i depositanti avrebbero ritirato i denari. L'Irlanda non e' in grado di far fronte ad una tale fuoriuscita di cash. Creando una banca di deposito con garanzie statali (che interverranno, penso), questo rischio dovrebbe venire evitato. E questa banca potrebbe finanziare il capitale della bad bank, senza ulteriori dissanguamenti. Direi che il Ministro delle finanze e' una delle persone piu' intelligenti che abbia visto. Ed anche per questo ho una posizione sulle LT2 di BOI e AIB. Saluti

 

[davide8]

Per Ferdo. Si. Speriamo che lo Stato polacco attraverso l'ente di controllo della stabilita' bancaria, non crei problemi all'affare per ritorsione contro la mancata scelta della banca PKO BP, a capitale prevalentemente statale. Penso che,per creare un ambiente favorevole, Santander abbia proposto l'OPA sul restante.

 

[discipline]

calma...

Sept. 10 (Bloomberg) -- Banco Santander SA agreed to buy a 70 percent stake in Bank Zachodni WBK from Allied Irish Banks Plc for 2.94 billion euros in cash, the bank said in a filing today.

Santander Agrees to Buy 70% Stake in Zachodni for EU2.9 Billion - Bloomberg

 

[discipline]

New Anglo bonds risk 'junk' status label

Bonds in the new Asset Recovery Bank, which will replace Anglo Irish Bank in time, could be reduced to 'junk' status if the Government does not give bondholders specific guarantees, Moody's has warned.
Meanwhile, the wind-down of this recovery bank is going to take between seven to eight years, political sources indicated last night.
Moody's said "significant uncertainties'' remained about the plan to split the bank into an Asset Recovery Bank and a savings bank, known as the Funding Bank. The agency said unless government guarantees were provided for senior bonds, a downgrade could result, to even sub-investment level, otherwise known as 'junk'.
Its analyst Ross Abercromby noted that the blanket guarantee of all senior debt expires at the end of the month, although many issues are covered under a separate arrangement known as the Eligible Liabilities Guarantee. Equally, if guarantees are given, an upgrade is possible.
The agency said there were two key uncertainties facing the new entity -- whether its assets will deteriorate further and, secondly, will it gain European Commission approval. It said Anglo had "poor standalone fundamentals" and would likely need further capital.
Announcing the break-up of Anglo this week, the Government was unable to say how much the plan would cost the taxpayer or how long it would take to implement an "orderly workout" of the bank's loans.
Pressed on a timeframe for the wind-down, Mr Lenihan said it would be "difficult to see it going beyond 15 years".
But government sources said last night it was estimated that it would take "seven to eight years" to work out the loans.
Under the plan the €36bn worth of business loans held by Anglo will go into the Asset Recovery Bank and the €46bn worth of deposits will go into a Funding Bank. Already, €36bn worth of loans has been transferred to the National Asset Management Agency.

New Anglo bonds risk 'junk' status label - Irish, Business - Independent.ie

 

[discipline]

BoI to hold off on €1bn debt issue for weeks

A MOOTED billion euro bond issue from Bank of Ireland (BoI) is likely to be put on ice for several weeks, the Irish Independent has learned.
The market had been expecting BoI to launch the bond sale on Monday, but the plan was aborted amid a spike in interest rates for Irish government debt.
Sources close to the bank confirmed that other recent market developments made an imminent issue unlikely. This includes the prospect of further clarity over the final cost of Anglo Irish Bank's bailout as early as October.
BoI believes this clarity may improve market sentiment towards Irish bank debt and ultimately reduce the interest BoI will have to pay.

Value
This week's extension of elements of the bank guarantee scheme may also improve sentiment, sources said.
BoI is also busy on its latest liability management exercise, attempting to swap C$400m (€300m) worth of existing Canadian bonds for new ones.
The bank is offering bondholders who switch a higher interest rate in exchange for an extended maturity date.
The effect will be to improve the bank's capital position, since bonds can be carried at a higher value when they're further from maturity.
An announcement on the success of the offer is expected on Thursday. BoI has already carried out several liabilities management exercises this year.

BoI to hold off on €1bn debt issue for weeks - Irish, Business - Independent.ie

 

[Imark]

New Anglo bonds risk 'junk' status label

Bonds in the new Asset Recovery Bank, which will replace Anglo Irish Bank in time, could be reduced to 'junk' status if the Government does not give bondholders specific guarantees, Moody's has warned.
Meanwhile, the wind-down of this recovery bank is going to take between seven to eight years, political sources indicated last night.
Moody's said "significant uncertainties'' remained about the plan to split the bank into an Asset Recovery Bank and a savings bank, known as the Funding Bank. The agency said unless government guarantees were provided for senior bonds, a downgrade could result, to even sub-investment level, otherwise known as 'junk'.
Its analyst Ross Abercromby noted that the blanket guarantee of all senior debt expires at the end of the month, although many issues are covered under a separate arrangement known as the Eligible Liabilities Guarantee. Equally, if guarantees are given, an upgrade is possible.
The agency said there were two key uncertainties facing the new entity -- whether its assets will deteriorate further and, secondly, will it gain European Commission approval. It said Anglo had "poor standalone fundamentals" and would likely need further capital.
Announcing the break-up of Anglo this week, the Government was unable to say how much the plan would cost the taxpayer or how long it would take to implement an "orderly workout" of the bank's loans.
Pressed on a timeframe for the wind-down, Mr Lenihan said it would be "difficult to see it going beyond 15 years".
But government sources said last night it was estimated that it would take "seven to eight years" to work out the loans.
Under the plan the €36bn worth of business loans held by Anglo will go into the Asset Recovery Bank and the €46bn worth of deposits will go into a Funding Bank. Already, €36bn worth of loans has been transferred to the National Asset Management Agency.

New Anglo bonds risk 'junk' status label - Irish, Business - Independent.ie

Hai messo il dito sulla piaga, IMHO. Perché secondo me le prospettive di ripagamento del nominale anche sui senior sono tutt'altro che certe una volta che siano finiti nella bad bank e privati di garanzia statale.

Il meccanismo di cui si parlava con Davide ha infatti l'effetto di sganciare il destino del debito sovrano irlandese da quello di Anglo, di consentire alla bad bank di funzionare senza ulteriori infusioni di denaro pubblico, e dunque di tamponare l'emoraggia di cash, e di rinviare il problema dei senior unsecured, per i quali non mi sorprenderebbe vedere una qualche estensione cronologica della garanzia statale (magari fino a quel 2012 sempre più "data spartiacque" per la finanza).

O forse nessuna garanzia, dipendendo dalla struttura delle scadenze, se il cash ricevuto dalla good bank fosse sufficiente nei 24 mesi a fare fronte alle scadenze debitorie.

In ogni caso non mi sorprenderei se il bond emesso dalla bad verso la good fosse sovraordinato gerarchicamente ai senior unsecured che la bad erediterà da Anglo.