Abadi willing to buy AIB debt again

New York investment banker Carlos Abadi was among the losers when AIB imploded, wiping out $6.3 billion of junior bonds.

Two years later, he’s willing to buy the lender’s debt again.

The president of Abadi and Co said the restructuring of Allied Irish, which cost taxpayers $27.6 billion, had restored capital to levels acceptable to bondholders.

The State’s second-biggest lender has €3 billion of debt due this year, according to data compiled by Bloomberg, and is planning its biggest fundraising since a Government bailout forced investors to accept as much as 90 per cent less than they were owed.

The bank now wants to sell senior unsecured and subordinated debt after issuing its first covered bond in more than five years in November.

“Senior debt would be a slam dunk and sub debt is also credible for the right clientele at the right pricing level,” said Mr Abadi, who expects his ACGM broker-dealer unit to be a likely buyer of the debt. “I’m prepared to extend new financing to AIB. Post-restructuring it has a very strong capital position.”

Mr Abadi said his company “suffered a significant loss” on its AIB debt holdings. He started a legal challenge to the burden sharing, which was withdrawn in June 2011, days before it was due to go to court, with the Government making a contribution to his legal costs.

New York-based Aurelius Capital Management, which reached a settlement with the Government after a court hearing, said at the time that bondholder losses “would chill foreign investment in Ireland for years to come”.

Officials at Aurelius didn’t respond to a phone call and emails seeking comment on the planned bond sales.

AIB, which is 99.8 per cent State-owned, returned to public debt markets in November for the first time since March 2010.

– (Bloomberg)