Michael McGrath (Cork South Central, Fianna Fail)
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Question 50: To ask the Minister for Finance his plans to impose losses on the remaining unsecured, unguaranteed senior bondholders at Anglo Irish Bank and Irish Nationwide Building Society; when he will finalise his position on the repayment of the $1 billion Anglo Irish Bank bond due for repayment on 2 November 2011; who is the holder of this bond; and if he will make a statement on the matter. [29347/11]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, the Government is considering burden sharing with senior bondholders in both Anglo and INBS in consultation with our EU partners. In the current circumstances, the State is not in a position or minded to act unilaterally in this regard. I had the opportunity to meet with President Trichet on the margins of the Ecofin meeting in Poland on Saturday, 17th September. I raised with him the issue of the burden sharing with the senior unguaranteed bondholders in Anglo (including INBS). This was unresolved business and I pressed the case for such burden sharing. However, President Trichet was of the strong view that such action was not in the interests of Ireland or the Euro Area, particularly given the challenges facing the euro area at this time and the contagion that we witnessed recently that has affected Italy and Spain. Commissioner Rehn also made the same point on this issue when I met him at a separate meeting.

President Trichet was very complimentary of the progress being made by Ireland and he noted the narrowing of bond spreads that had taken place, which he would not wish to see put at risk. I noted the points he made and I said I would report back to Government on the discussion.

I also mentioned to President Trichet, and in the separate meeting with Commissioner Rehn, the situation in relation to the Promissory Notes. These Promissory Notes are amounts due from the State to Anglo Irish Bank as consideration for the capital provided in 2010. While the State has budgeted to meet both the interest and cash requirements I am eager to have the Promissory Notes examined to see if they can be re-engineered in a better way for the State, for example, by lengthening their maturity and reducing their interest rate. This re-engineering, which is under consideration, would have to be completed in a manner which does not impact on the capital position of Anglo.

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.