Irish Government "haircuts" Bristol & West Shareholders

Ian_W

Mr_Mumble wrote: »

Seems to be an EU directive that's responsible for BoI's ability to treat small (<50,000 Euro) debt holders unequally.

I'm not quite sure that the directive DOES give the BOI that ability. As described in the original Alphaville article it appears to be more about consumer protection than investor "shafting"!

Under the European Union’s prospectus directive, companies issuing securities or offering exchanges can choose to either aim them at all investors, including smaller ones, which lengthens the process and carries extra costs, or deem them suitable only for sophisticated investors, which shortens the process. One way of doing this is to impose a €50,000 threshold.

-Source.
Not claiming ANY legal expertise in this complex area but it seems rum (as Rumpole would say) that the offer for the exchange contains differing terms for sophisticated investors and ordinary punters, so isn't an either/or situation.

Mr_Mumble

FSA say they are not getting involved, also some stats:

As of Friday, the first tender deadline, 72.4 per cent of bondholders had agreed to sell their bonds back to the bank at deep discounts. Over 95 per cent of those bondholders opted to be paid in bank shares, rather than in cash. That is of course, the option not available to smaller investors, under a Brussels directive that prevents them from accepting a debt-for-equity swap. Nevertheless, the relatively high take-up in the preliminary tender does not bode well for hold-outs, including those pensioners.

Ian_W wrote: »

I'm not quite sure that the directive DOES give the BOI that ability. As described in the original Alphaville article it appears to be more about consumer protection than investor "shafting"!
-Source.
Not claiming ANY legal expertise in this complex area but it seems rum (as Rumpole would say) that the offer for the exchange contains differing terms for sophisticated investors and ordinary punters, so isn't an either/or situation.

I agree the directive was probably intended to offer consumer/investor protection but imho it is being used to screw 'em! PIBS are often mentioned in Sunday money supplements yet do not offer the same protection as most other financial products mentioned in the media.

The FSA delineates between the "ordinary punter" and the "sophisticated investor" but Brussels draws a line in terms of amount invested. What a mess.

Mr_Mumble

FTAlphaville - Pensioners win their BoI burdensharing battle

the Bank currently intends to instigate a new offer to holders of the £75,000,000 13.375 per cent. Unsecured Perpetual Subordinated Bonds at a future date. In so doing, the Bank will seek to address the unique difficulties that have been highlighted to the Bank to date with regard to participation in the terminated Offers by the holders of the £75,000,000 13.375 per cent Unsecured Perpetual Subordinated Bonds.

Full press release at the link.

Ian_W

Further coverage and comments on CITYWIRE.

It appears only 12% of the smaller investors had accepted the offer and they,with those who didn't respond, will now be subject to the revised offer. However, those who sold for circa 27p on the secondary market are well and truely stuffed if the revised offer is above that level.

The FSA "not bovvered"? No wonder Private Eye refer to them as the Fundamentally Supine Authority! Sounds about right.