FURTHER DETAILS on Irish Nationwide’s complex method of raising funding this month have emerged, and make the transaction even more intriguing.

As reported last week, the troubled building society issued €4 billion of bonds to itself; applied the Government guarantee to the debt; and then went to the European Central Bank to swap them for cash.

In a mechanism put together by the National Treasury Management Agency and advisers at BNP Paribas, Irish Nationwide issued the bonds to its property development subsidiary Pangrove and bought them back, leaving €50,000 worth with the subsidiary.

It then headed to Frankfurt to collect its money.

The funds helped Irish Nationwide repay some €4 billion in debt raised using the September 2008 blanket guarantee. This debt was due to mature before the end of this month.

The bonds are expected to be repaid with Government- guaranteed bonds received from Nama in return for upcoming loan transfers, so it’s a short-term six-month transaction to allow State-owned Irish Nationwide to meet a potentially difficult funding deadline.

It’s enough to make your head spin.