Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

In the course of 2010 and 2011 a number of liability management exercises were conducted by the covered banks for the purpose of generating additional core tier 1 capital and to strengthen the quality of the capital base of the banks. Since this Government came into power the cash required for the recapitalisation of the banks was reduced by €5.8 billion through burden sharing with subordinate bondholders. The contribution from burden sharing with bondholders of this type amounts to approximately €15 billion since the banking crisis with almost €3.7 billion of that number coming from IBRC alone. That said, despite the significant efforts taken over the course of 2010 and 2011, there was a number of subordinate bonds with a nominal value of €280 million that continued to remain outstanding at the time of the liquidation of the IBRC in February 2013. These bonds remained outstanding both as a result of a refusal by investors to participate in IBRC's liability management exercise in 2010, that is to take a voluntary loss, and also as a result of an unfavourable English High Court ruling against the bank in July 2012.

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