ANGLO IRISH Bank chief executive Mike Aynsley has said imposing losses on the bank’s senior bondholders was of “questionable” value, given the prices at which they were trading.
Mr Aynsley said Anglo’s $1 billion (€711 million) senior unguaranteed bond due on November 2nd was trading at between 93 and 95 cent in the euro.
The savings to be made through a consensual deal with the bondholders were “very minor” considering the cost involved, he said.
The European Central Bank has strongly opposed moves by the Government to seek so-called burden-sharing with this class of bondholders, fearing the knock-on effect of losses on this higher ranking level of bank creditor.
Anglo has €2.8 billion of senior unsecured unguaranteed bonds and is costing the State €29.3 billion to cover heavy loan losses.
Burden-sharing on senior bonds due for repayment at later dates, which are trading a lower levels, was possible but had to be agreed between Government and the EU authorities, said Mr Aynsley.
Minister for Finance Michael Noonan has said burden-sharing with senior bondholders was “not as significant” an issue as it was, following the interest rate cuts on the State’s EU-IMF bailout loans.
Speaking at a Chartered Accountants Leinster Society lunch in Dublin, Mr Aynsley said there needed to be a change in old leadership within the banks.
The Irish banking system was still broken, he said, and new people were required to regain the confidence of the Irish people.
He later told reporters that he was not targeting any particular individuals with his comments.
“If you are going to rebuild the confidence of the public in the banks, you have to do that through new people that haven’t been involved previously in the pre-crisis times,” said Mr Aynsley.
Anglo will continue to pursue former chief executive David Drumm in the US bankruptcy courts over loans of €8.6 million, even if the legal costs outweigh the commercial gain, he said.
“It is the best economic value that you get. There is a very important point in pursuing people who have done fraudulent things.”
Mr Aynsley also said a shorter wind down of Anglo within the targeted 10-year period depended on “how friendly markets are”.
