Thursday, 23 June 2011
Department of Finance
State Banking Sector
Question 73: To ask the Minister for Finance with regard to Anglo Irish Bank repaying a €750 million bond on 31 January 2011, if it was senior unsecured debt borrowed on the 17 January 2006 at the height of the property boom; and to whom was this money repaid [16970/11]
The €750 million bond that matured on 31 January 2011 was issued in January 2006 (the bond settled on 31 January 2006). This was a senior unsecured bond which was guaranteed by the Irish Government from September 2008 until September 2010 under the CIFS scheme. The €750million was repaid to the bond holders who held the bond on its maturity date. The bank's medium term debt is publicly traded and dealt through clearing house systems. An issuer (such as Anglo) does not have any access to the records of those systems. Furthermore, the issuer has no means of establishing the underlying ownership at any given time. Unlike in the case of shares, the holders of listed debt instruments are not subject to a disclosure regime.
The Deputy will be aware that as bonds are usually issued in bearer form the purchasers of the bonds are unknown to the issuing bank.
When a bank issues a bond, whether by private placement or public issue, it would be usual practice for a securities depository company, such as Clearstream and Euroclear, to hold the bond on behalf of their customers and the banks would not necessarily know the actual owner of the bond.
Securities depository companies such as Clearstream and Euroclear usually manage, safekeep and administer the securities that it holds on behalf of the purchasers of the bonds and the identity of the purchasers of the bonds is not disclosed in the public domain or to the issuer.