Ireland

Bank of Ireland has painted a worst-case scenario where the State’s stake would rise to 87 per cent if no bondholders accept its debt for cash or shares proposals and investors shun a subsequent rights issue, the Irish Times reported. The bank said it planned to issue shares at between 11.3 cent and 11.8 cent a share to subordinated bondholders taking up a debt-for-equity swap before July 7th. This compares with yesterday’s closing price of 14 cent.

House prices in Dublin have fallen nearly 50 per cent since their peak in 2007, the Central Statistics Office has said. According to the CSO’s Residential Property Price Index, house prices in the capital are 46 per cent lower than 2007, while apartment prices have fallen 53 per cent since their high in February 2007, the Irish Times reported. Nationally, residential property prices fell by 1 per cent in the month of April. This compares with a decline of 1.7 per cent recorded in March.

Bank of Ireland has offered to buy back debt from subordinated bondholders for 10 per cent or 20 per cent of its original value in return for cash, or double this level if they accept shares instead, the Irish Times reported. The offer is part of the bank’s efforts to raise €5.2 billion to meet the Central Bank’s capital target. The bank announced plans to impose losses on the bondholders on Tuesday and released more details yesterday on the offer relating to €2.6 billion of debt. Analysts estimate that the bank will raise about €2 billion from the liability management exercise.

The new board and management at the international property company formerly owned by businessman Seán Quinn will seek to appoint a bankruptcy receiver to the family’s company in Sweden, the Irish Times reported. Mr Quinn and his family won a court ruling in Sweden last month over-ruling the dismissal of Quinn Investments Sweden by the receiver that was appointed by Anglo Irish Bank to its parent Irish company.

The seasonally adjusted Live Register rose by 2,600 in May, bringing the total number of people signing on to more than 443,000, new figures from the Central Statistics Office (CSO)have shown, the Irish Times reported. The increase pushed the standardised unemployment rate slightly higher in May, to 14.8 per cent compared with 14.7 per cent a month earlier. The Live Register also includes casual and part-time workers. The official unemployment rate is measured by the CSO’s Quarterly National Household Survey, which showed the rate was 14.7 per cent in the fourth quarter of last year.

The family of businessman Seán Quinn have brought Commercial Court proceedings claiming that loans of about €2.34 billion made by Anglo Irish Bank to various Quinn companies and Cypriot-registered companies are unenforceable because they were issued for “an illegal objective of market manipulation” — support of the Anglo share price, the Irish Times reported. The action by Mrs Patricia Quinn and her five children — Aoife, Colette, Brenda, Ciara and Seán Quinn Jnr — arises from events of the past two years that led to the family losing control of companies in the Quinn group.

A jewellery wholesaler that numbers Dragons’ Den star Bobby Kerr among its directors has been put into receivership by Bank of Scotland (Ireland) over multimillion euro debts. Emarno was formed in 2007 by Tony Moroney and Pearse Curran, The Sunday Business Post reported. They bought the business from the Anthony Nicholas group, which also owns the Fields jewellery chain. Emarno wholesales jewellery in Ireland and Britain, including the sale and distribution of jewellery by designer Paul Costelloe.

Under pressure to reduce its holding of troubled loans, Allied Irish Banks PLC has struck a deal to sell a portfolio of roughly $1 billion in U.S. commercial mortgages to Blackstone Group LP and Wells Fargo & Co., according to people familiar with the matter, Dow Jones Daily Bankruptcy Review reported. Allied Irish Banks is selling off about $1 billion in troubled loans tied to, among others properties, the MetLife Building in New York, left rear.

Credit rating agency Moody’s has warned that Ireland could be pushed further into financial turmoil if Greece restructures its debt, saying bailout recipients could have debt downgraded to “junk” status if Athens defaults, the Irish Times reported. Amid renewed market attention on Spain and anxiety about new credit downgrades of Italy and Belgium, Moody’s made it clear yesterday that a Greek default would be “highly destabilising” and would have implications for the creditworthiness of bond issuers across Europe.

AIB and Bank of Ireland have lent €8 billion to small and medium business in the last year, €2 billion more than government targets, according to the latest quarterly report from the Credit Review Office, the Irish Times reported. The two main Irish banks – which are responsible for about 60 per cent of the lending market – had been required to lend €3 billion each to SMEs this year, as a condition of the State’s support for the banks.