Bank of Ireland threatening to wipe out pensioners' bonds

VT82

Savvysaver wrote: »

If the BoI had been would (sic) up then the PIBS holders would not have been complaining

In a winding up, the PIBS holders wouldn't have got anything until all the assets (mortgages on once over-valued Irish residential properties) had been sold at fire-sale prices, and all depositors had been repaid in full, not just up to the compensation limit. In other words, they would probably have got diddly.

Savvysaver

VT82 wrote: »

In a winding up, the PIBS holders wouldn't have got anything until all the assets (mortgages on once over-valued Irish residential properties) had been sold at fire-sale prices, and all depositors had been repaid in full, not just up to the compensation limit. In other words, they would probably have got diddly.

Exactly my point!
Bank wound up, PIBS holders loose their money, they took the risks and they cant complain

Bank carries on trading as normal, special legislation passed to confiscate the junior bondholders, very good reason to complain.

Reaper

As Arc Welder touched on in his links the PIBS incident is only the latest in a fairly disgraceful cost cutting exercise that they have been doing.

Previously it was holders of subordinated debt (fairly similar to PIBS). Holders were attacked using the "Prisoner's dilema" gameplan. They had to either voluntarily accept a huge cut in the value of their investments or, if they did not vote in favour of that and it got passed, they would only get back 1p out of every £1000 they held!

The strategy being that they would vote for it for fear of being in a minority and ending up getting just 1p.

It is all of dubious legality.

gadgetmind

ChiefGrasscutter wrote: »

Ah yes, I remember they were indeed heavily sold to the pensioners.
They figured that the pensioners really didn't give a monkey's about the capital value varying --- they just were interested in the never ending high interest payments ad infinitum.

These PIBs were bought at a time of high interest as a sort of annuity. In today's low interest environment, they do look like a good deal, but so are the annuities people bought a decade or so back compared to those today. You make the decision and lock in a reliable income stream.

The whole transfer to BOI was a bit dodgy as the prospectus was misleading, and attempting to wipe out UK pensioners while preserving the interests of those in Ireland, even worse.