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(See EXT4 for more on the euro-area financial crisis.)
Feb. 9 (Bloomberg) -- Ireland will seek to take advantage of any “arrangement” that Greece agrees with the European Central Bank on the country’s debt, as the government seeks help refinancing the bailout of the former Anglo Irish Bank Corp., Finance Minister Michael Noonan said.
“There’s a suggestion that there might be some arrangement made with the ECB,” Noonan said in an interview yesterday with Dublin-based broadcaster Today FM when questioned about Greece. “If that happens we’ll be watching it very closely and we’ll try to avail of that.”
While holders of Greek bonds face losses of more than 70 percent, Ireland’s government has insisted it won’t seek to impose any losses on sovereign bondholders. Noonan said in a separate interview that any concessions that Greece gets from the ECB may help Ireland’s negotiating position as it seeks to refinance about 30 billion euros ($40 billion) of so-called promissory notes used to rescue the former Anglo Irish, now known as Irish Bank Resolution Corp.
The ECB is prepared to swap its holdings of Greek government bonds to help cut the country’s debt burden, Dow Jones reported two days ago, citing unidentified people briefed on the talks. The agreement could reduce Greece debt by as much as 11 billion euros, Dow Jones said.
“I see it as strengthening our negotiating position,” Noonan said in a later interview with broadcaster RTE. “If the ECB are prepared to make this kind of concession to Greece, it would encourage me to think that they might be prepared to make a concession on the promissory note.”
Irish bonds have delivered the best returns in the euro area in the past year, as the ECB bought the nation’s debt and investors grew more confident that the government will be able to pay its bills.
Irish bonds returned 20 percent in euro terms over the past year, according to an index compiled by Bloomberg and the European Federation of Financial Analysts Societies. Ireland’s October 2020 bonds, regarded as the benchmark, yielded 7.01 percent yesterday, down from 9.67 percent on Nov. 25.
“The government’s been very clear that it is not looking for the private sector to take losses on its debt,” Brian Devine, chief economist at Dublin-based NCB Stockbrokers, said by phone. “While it may look to avail of a deal along the lines of what is being considered by the ECB for its Greek bonds, it would need to be very clear that it would not have negative implications for the country’s privately-held bonds.”
--Editors: Dara Doyle, Eddie Buckle
To contact the reporter on this story: Joe Brennan in Dublin at firstname.lastname@example.org
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