Joan Burton (Dublin West, Labour)
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Question 348: To ask the Minister for Finance the extent of State capital injections to date into Anglo Irish Bank since it was nationalised; the level of further capital injections expected in 2009 and 2010; if he expects the State to see any return on this capital injection; and if he will make a statement on the matter. [33913/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As per the Government announcement of 29 May last, €4 billion in capital has been provided to Anglo, in three tranches; €3 billion on 29 June, €827 million on 6 August following completion of the bank's debt buy back exercise, and the remainder, €173 million, on 25 September.

This capital was provided to Anglo to protect the economy from the wider losses that would occur in the event of the failure of the bank, to protect the €64bn of deposits in the bank and to prevent the bank becoming a systemic threat to the financial system. If a profit is generated by Anglo, this would be retained initially to reinforce Anglo's capital position rather than paying a dividend. As part of the terms of the capital provision, Anglo will prepare a restructuring plan which will examine all options for the future of the bank, and which will address the issue of compensatory measures for the capital provision.

Any possible further capital requirement by Anglo will be determined by the extent of impairment on the bank's loan book and by the precise terms of the expected transfer of €28 billion of Anglo loans to NAMA. Work related to both of these aspects is currently ongoing. When this work is complete, I will be in a position to make an estimate of Anglo's future capital needs and any capacity there is to generate capital internally.

The Government remains committed to providing institutions participating in NAMA, which includes Anglo, with an appropriate level of capital to continue to meet their requirements. Of course this would be done in a manner that is consistent with EU State aid rules and the credit needs of the economy.

Joan Burton (Dublin West, Labour)
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Question 349: To ask the Minister for Finance the amount of subordinated debt remaining on the books of Anglo Irish Bank, broken down by category and seniority; the level of subordinated debt to which the counterparty is a current or former member of the Board of Directors or senior management team; the reason he decided to extend the State guarantee of existing subordinated debt; if he expects any of the holders of existing subordinated debt to share in the financial pain to be felt by taxpayers; and if he will make a statement on the matter. [33914/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Anglo Irish Bank currently has €2.35 billion of subordinated debt, made up of €600 million in Tier 1 debt, €43 million in Upper Tier 2 debt, and €1.7 billion in Lower Tier 2 debt.

As the Deputy will be aware, Anglo recently undertook a debt buy back exercise, which crystallised losses for bondholders, who received payments significantly less than the face value of the bonds they held, and which generated a €1.6 billion profit for the bank. The undertaking of a future liability management exercise is a matter for consideration in the first instance by the Board of the bank on a commercial basis, taking into account the overall funding and capital implications of such an exercise for the bank.

Anglo's subordinated debt is publicly traded and is dealt through clearing house systems. As an issuer, Anglo does not have access to the records of those clearing systems, and does not have a means of establishing the underlying ownership of its subordinated bonds at any given time. Unlike in the case of shares, the holders of listed debt instruments are not subject under company law to a disclosure regime.

Anglo is aware that its former chairman, Sean Fitzpatrick, purchased a beneficial interest in certain debt instruments of the Bank during 2008, at which time the price of the debt instruments involved was higher than that paid under the bank's recent debt buy back exercise. A specific disclosure on this holding was made in note 50 of Anglo's annual accounts for 30 September 2008.

Dated subordinated debt issued on or after the commencement date of the new draft Eligible Liabilities Guarantee (ELG) Scheme will not be guaranteed either under the ELG Scheme or under the current Credit Institutions Financial Support (CIFS) Scheme. However, dated subordinated debt already guaranteed under the CIFS Scheme will remain guaranteed under the CIFS Scheme due to the irrevocable nature of the CIFS guarantee.

Joan Burton (Dublin West, Labour)
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Question 350: To ask the Minister for Finance if he can confirm reports that he has advised the EU Commission that there was no prospect of recovering the €4 billion injected into Anglo Irish Bank; and if he will make a statement on the matter. [33915/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Government decided to provide €4bn in capital to Anglo to protect the economy from the wider losses that would occur in the event of a failure of the bank, to protect the €64bn of customer and interbank deposits in the bank, and to prevent Anglo becoming a systemic threat to the financial system.

As part of the process of obtaining EU approval for the capital injection to Anglo, the European Commission was advised that it was not currently envisaged that there would be a dividend paid on the capital provided. If a profit is generated by Anglo, this would be retained initially to reinforce Anglo's capital position rather than paying a dividend, and the Commission accepted this point.

As part of the terms of the capital provision, Anglo will prepare a restructuring plan which will examine all options for the future of the bank, and which will address the issue of compensatory measures for the capital provision.

The Board of Anglo is currently progressing the development of this restructuring plan, which will be submitted to the European Commission for approval before end-November.