Disputes between banks and government in Dublin Ireland – Investment rebel creditors

A group of investors has turned a U.S. law firm to prevent the planned conversion of bonds into shares. It holds debt securities of the bank by Bank of Ireland, almost one billion euros. With the conversion, the investors had lost sixty percent of the value of their original investment.

The banking crisis in Ireland, almost all institutions of government are supported directly or indirectly. The crisis was precipitated by the bursting of a housing bubble. Ireland’s banking sector is suffering greatly from the bad real estate loans. The crisis forced Ireland to take in the fall of 2010, aid packages from the International Monetary Fund and the EU.
The government has ordered that all the bondholders have to help with the necessary recapitalization of the industry. Normally, such an investor group is protected from such actions.

It is legally very controversial, to swap bonds into shares. But in the wake of the financial crisis and the euro-debt crisis steps are taken, the vorsehen.Zu a greater participation of private creditors in imbalances of banks or states wants the planned conversion of bonds into shares, the Bank of Ireland also carry out a capital increase. The shares of existing shareholders would be diluted. These steps will contribute 4.3 billion euros of bank equity. Should the bondholders by the capital increase implemented or fail due to low demand, the Irish government would increase its stake further to raise the necessary capital. Currently, the bank to 36 percent of the state. The state would have to increase the participation, Dublin would, according to calculations on a stake of up to ninety percent.