Cantillon

Inside the world of business

Elderfield on message, but can 'certainty' bring confidence?

THINK OF it as drawing a very dark line under the matter with an indelible pen. Matthew Elderfield, the Central Bank’s head of financial regulation, used a speech at media company Thomson Reuters in London to rule out any loss-sharing with senior bondholders in the four so-called “live” banks – AIB, Bank of Ireland, EBS and Irish Life and Permanent.

The Government would only seek to impose losses on senior bondholders at Anglo Irish Bank if it required more than the existing bill of €29.3 billion, he said.

The bank said last week that it did not expect this bill to rise further, while Elderfield said yesterday that there was no immediate prospect of that number changing. So the Government may never need to bite that particular bullet.

The regulator and the Government are clearly on message in attempting to end the uncertainty around burden-sharing with senior bondholders.

The irony, of course, is that Fine Gael itself helped to create some of that uncertainty by raising the prospect of passing losses onto senior bondholders during the election campaign, only to backtrack once in Government.

Sharing losses with senior bondholders at the lenders that would form the basis of a new banking system was never a prospect as these banks would eventually need to start funding themselves again. Investors may well have chosen not to lend to them again out of spite if there had been a default or a coercive haircut on their senior debt.

Elderfield said in his speech that the markets now have certainty about Government policy on senior bondholders.

John Moran, the senior Department of Finance official leading the Government’s bank restructuring plan, said that depositors still had to be convinced that Irish banks were safe places for their money.

The banking crisis has always been about cash, confidence and certainty. Removing concerns about the banks is essential, but after five bailouts and line-drawing attempts, it will take some time to convince investors.

Mountbrook rechristened

THE PROPERTY developer Seán Dunne has changed the name of his Mountbrook Homes holding company to the less euphonious brandname Mavior. There was no response to a request for a comment from the group and googling the word Mavior shed no light as to the origins of the new name. Nor has there been any change to the Mountbrook website.

The Mountbrook group was involved with developments on Sir John Rogerson’s Quay in Dublin, the Jurys/Berkeley Court deal in Ballsbridge and the Whitewater Shopping Centre in Newbridge, Co Kildare. Mountbrook Homes has outstanding mortgages from the Bank of Ireland in relation to Sir John Rogerson’s Quay and so is presumably dealing with the National Asset Management Agency.

A recent filing to the Companies Office details how Dunne and his co-director Ross Connolly held an extraordinary general meeting in the Mountbrook offices on Merrion Square on March 30th, at which the name change was decided. It was a single-item egm.

There has been no change to the ownership. Two limited companies in the Isle of Man hold the Mavior shares. Mavior itself continues to be an unlisted company. Other companies in the Dunne stable continue to use the Mountbrook name, not least Mountbrook Merrion Road Development Ltd, which is an Isle of Man company incorporated in 2006 that registered here as an external company, using the Merrion Square address, in 2009. It in turn owns Padholme, the unregistered company Dunne used when buying the Jurys/Berkerley Court site in 2005.

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