THE MAJORITY of investors in a AIB subordinated bond, which is the subject of a legal action taken by a New York hedge fund to stop the Government inflicting losses, have voted to accept the bank’s debt buyback.
The bank said that resolutions to buy back 2025 £500 million and 2019 £368 million subordinated bonds were not passed at meetings in London yesterday.
A meeting on a third bond, the 2017 €500 million bond, was adjourned as it had no quorum. Resolutions were passed on the 12 other bonds to accept AIB’s offers.
New York fund Aurelius Capital Management is suing the Minister for Finance over the Subordinated Liabilities Order which wipes out the value of the AIB bonds.
Aurelius is an investor in the £368 million 2019 bond on which the resolution to accept the bank’s cash offer was not passed.
However, it is an investor in the bank’s €868 million 2019 security in which bondholders voted for the resolution. The two bonds are the only securities out of the 18 bonds in the buyback that are not yet subject to the Minister’s order.
Even though the resolution was not passed on the 2025 £500 million bond, this is subject to the Minister’s order which wipes out its value.
The aim of the order was to encourage bondholders to accept the bank’s buyback.
:quality(70)/s3.amazonaws.com/arc-authors/irishtimes/2f17d73d-927c-4607-b082-c5959ede1efa.png)
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)