Protests as AIB repays €1bn to bondholders
AIB REPAID a €1 billion bond to investors yesterday as an October 2009 bond came to maturity.
The unsecured, unguaranteed senior bond also carried a fixed interest rate of 4.5 per cent, which was paid annually in arrears. The final year’s interest was paid yesterday, equating to an estimated €45 million.
The repayment of the bond attracted criticism from some opposition politicians as well as small-scale protests from a number of groups in Dublin.
The €1 billion bond was issued by the bank in 2009 as part of its €30 billion floating rate note programme which commenced in 2007. The biggest disclosed holders of the bond which matured yesterday included Swiss private banks Lombard Odier, Pictet Asset Management, Portuguese bank Banco Espírito Santo, Allianz Global Investors France, Aberdeen Asset Management and First Eagle Investment Management.
Investors received the full 100 cents in the euro on their investment. At its low in February 2011, the bond traded below 75 cents in the euro.
AIB and the EBS, which have been merged, have approximately €1 billion in further senior, unsecured bonds due to be redeemed before 2017, with the last AIB bond of this kind due for repayment at the end of 2014.
Yesterday’s repayment brought to more than €18 billion the amount that banks have repaid to all classes of bondholders this year.
Sinn Féin finance spokesman Pearse Doherty said the payment of the bond was “further evidence of the Government’s failure to deal with the debt crisis”.
“It is totally unacceptable for this bond to be paid. It is double the total cut to the social protection budget for 2012. It is almost double the total cut to the health budget in 2012. It is just under a third of the total adjustment the Government is set to make in next year’s budget.”
The Government should have put a plan in place months ago to deal with these bonds, signalling well in advance the State’s inability to pay, Deputy Doherty said.
“This is not public debt. It should not be paid with public money. The Government must change course and adopt a new approach.”
A number of small protests against the latest payment to unsecured bondholders took place yesterday.
Sinn Féin staged a protest outside AIB’s branch on O’Connell Street, while the Campaign Against Household and Water Taxes demonstrated outside AIB’s headquarters in Ballsbridge. A number of Occupy Dame Street supporters occupied AIB on Grafton Street.
In a statement, the group said it had occupied the bank in protests of the payment “that we have no obligation to pay”.
It added that AIB’s bondholders had “took a gamble on the Irish economy and lost. But the Government and the troika agreed that ordinary people in Ireland would cover these losses, through cuts to health services, cuts in benefits, and the imposition of a host of taxes that burden the poor and benefit the few.”