Your point is being over made and reflects a fevered state of mind.

I should know! Please ask your medical adviser for micardis. They lower my blood pressure very effectively. You deserve to have a long life, pointing out the errors of their ways!

A consistent identity would also build up credibility?

By not taking it there is still a recognition of the liability to a creditor but the cash is still part of the capital structure! As every diminution of capital will firstly impact reserves, it is vital that every cent remains.

The timing will be at years end. A week is a long time in politics. Months are a very very long time in an insolvent bank.

Here’s a link to the same material from the far more functional KildareStreet.com site that was recently brought to our attention:

http://www.kildarestreet.com/debates/?id=2010-02-03.677.0

In the debate, Minister Lenihan says

“There is a fundamental distinction between a bond that provided for the repayment of interest advanced on foot of an arrangement with a private investor and a capitalisation arrangement that was approved by the Commission itself. While the position is that the payments are stopped at present, that is without prejudice to the State making its case in the context of the restructuring plan that such preferential payments should be made.”

This seems to me to be suggesting that the government can get its preference share payment while at the same time the subdebt bond coupons do not get paid. If so, this seems to run counter to another fundamental distinction, which is that subdebt ranks ahead of preference shares in the capital structure — this is why the sub bonds had a dividend stopper in their contracts.

“which seems to me an unlikely (and probably not legal) outcome.”

Indeed, what i received from an analyst (and backed up by someone else as well):

“if the coupon deferral is reversed on the €3.5bn 8% gov pref the reversal will occur for the T1 securities”.

Possibly the wrong impression was given at the Oireachtais committee today, but clarity would be helpful all around.

“At this point i would imagine the EU wouldn’t have too much issue with the only resumed subordinated payouts then being to the government.”

And indeed, neither would I. That said, I spoke with someone who was at the Oireachtas committee session and they got the impression that Corrigan was saying the EU would allow payments to the government but not the subdebt holders, which seems to me an unlikely (and probably not legal) outcome. Hopefully the transcript will give a clearer picture when it’s released.

“So what exactly are we waiting for?”

At a guess - the buy back of all outstanding subordinated debt (possibly post NAMA), which isn’t all that much in fairness. At this point i would imagine the EU wouldn’t have too much issue with the only resumed subordinated payouts then being to the government.

See section 37 (3rd bullet) page 9.
http://ec.europa.eu/community_law/state_aids/comp-2009/n241-09.pdf

It seems to me that at some point, the EU expected the government to be paid the dividend. Though it doesn’t mention the timing.

Is this supposed to reassure bond markets?