Anglo Bonds No Cost to Taxpayer Talking Point Gets Full Rollout

In advance of next week’s $1 billion Anglo bond repayment (congrats to all our international hedgie readers), the government talking point that repayment of this bond doesn’t cost the taxpayer a cent is now getting a full rollout, with Michael Noonan on RTE Radio’s News at One today and Leo Varadkar on Tonight with Vincent Browne both at it.

Both ministers were insistent that because the IBRC (i.e. the new Anglo-INBS institution) has sold loans worth €2.5 billion for a loss of €500 million, thus realising €2 billion, that paying the remaining €3.7 billion in unguaranteed senior bonds won’t cost the Irish taxpayer any money.

Let’s make this as simple as possible: Even if you wanted to view this repayment as costless because Anglo has its “own funds” to repay the bond, ask yourself who would be the beneficiary of these “own funds” if they weren’t used to repay unguaranteed bondholders. Every cent going to these bondholders is coming from Irish taxpayers.

Slightly less simplistically, Leo acknowledges that we are putting large amounts of money in the form of the promissory note payments (“the only money we’re putting in is the promissory note” — ah yes, “Other than that Mrs. Lincoln ….”). How did they arrive at the figure for the promissory note? The figure was arrived at by figuring how much money was required to keep Anglo solvent, i.e. paying back all its bonds debts. If we didn’t pay back the unguaranteed bondholders, then we could revise the promissory note payments down.

I know that the remaining unguaranteed bond debts are dwarfed by the approximately €40 billion Anglo owes in ELA but this talking point is irritating all the same. Honestly guys, please stop.

23 replies on “Anglo Bonds No Cost to Taxpayer Talking Point Gets Full Rollout”

It’s one big circus and the main trick for prolonged enjoyment at the circus is to have a poor memory. On with the year. Next distraction, please.

Yet more accountamancy from the Banks and the Government. Money has to come from somewhere. You can’t just magic it away on the books somehow. Well…., you can on the books, but the books aren’t what counts.

Why don’t they just say it? “This is the cheapest bailout in the world, ever.” Sure it’s costing us nothin.

I feel like we’re back to the bloody future. The next thing will be the 21st century’s version of civil war politics with pro-v-against the future and up-coming treaty.

Of course, we’ll be out of our bloody minds.

@ Karl

On another thread jmc (I think it was) spoke of Anglo having a €140 billion currency swap book that was only partially worked through.

Do you know anything about this? If you do, can you say if jmc’s estimated further losses of €10 billion is likely to be accurate? Also these currency swaps accounted for in the recent stress tests? I remember Morgan Kelly in one of his infamous articles saying that the derivatives book of Anglo was likely to be a nightmare. Any thoughts on this?

So we did not just have a plain old fashioned banking crisis in Ireland…… – the rabbit hole goes far deeper.

My question to economists on this site – WHAT IS MONEY ? and does it even exist in this strange bank created derivative universe.


Hang on, hang on. Since the original Greek-haircut agreement a few months ago, having the EFSF fund the recapitalisation of ailing European banks has been on the table where previously it was not. (Yes @grumpy, I had noticed at the time.) Now just in the small hours of today the EU has agreed that the EFSF will indeed be used to fund the recapitalisation of ailing European banks once both the private sector and their national government is tapped out. No-one in the private sector would touch IBRC with a bargepole, and our government is completely reliant on EU/IMF assistance to avoid sovereign default. And … still the government has come away from the summit with no commitment that the EFSF will pick up the remaining €3.7bn bill for Anglo? The Irish taxpayer will still pay it all? Even though we might end up contributing (notionally, at least) to a bailout of French banks?

How is this possible? It’s always a thrill when my scrupulously low expectations are beaten to the downside. It was clear that there would be no EU digout for our banks until and unless the EU core was good and ready to start fiscal transfers direct to banks for its own reasons (or until and unless we forced the issue) – but to get nothing even after those transfers are agreed on? I was sure that Noonan would pull it off if France won the tussle on this. Perhaps this morning’s commitment is really just another “commitment” to think about such transfers, while in fact Germany (and maybe others) will continue to prevent the trigger actually being pulled for a long time yet, or perhaps ever. If so, fair enough – there’s nothing Noonan could do to change this without unilateral action (or a serious threat of it). Perhaps, because the details of the EFSF bank-digout mechanism are still being worked out, the government is hoping that it will be compensated a little later for the money it puts in this week. That would work out all right unless the rest of the EU never quite gets around to fixing up with us for this, or can’t recall ever agreeing to, which seems dreadfully likely. Or are we being fobbed of because we already agreed to €20bn in bank recap? Or (ho ho ho) because sure isn’t IBRC not a bank anymore?

@Joseph Ryan
Sorry, meant to response about Anglo IRS – Anglo are doing as you suggested – closing out some of their positions – this is where a chunk of the cash put in to them is going. The book is now down to, IIRC, 80 bn euro.

See here for a long thread with links to other threads (do you have all day?)

Karl, you are being deliberately obtuse.

I have just purchased a Mars bar, using coins from a pocket. But it did not cost me a penny. It was paid for by my trousers.

@colm mccarthy

I have just purchased a Mars bar, using coins from a pocket. But it did not cost me a penny. It was paid for by my trousers.


A special vestment vehicle. I like it very much.

From what I saw of Varadkar last night he was suggesting that the bond payments won’t cost the taxpayers anything extra. Extra being the key word here.

If that is the only point he is making then he is right.

As an Anglo shareholder, my blood boils when I read of even more money going to bondholders while misled shareholders haven’t even been informed by the promised Assessor about the values of their holdings (yes, I know, I know…).

@What Goes Up ….

Getting pretty close to agreeing with you …. Minister Noonan spinnin yesterday was most unhelpful ….

(I don’t take too much notice of Luce_Enda commenting on Mer_Kozy as they spout their one-liners from their pay_embargo breaching advisors – but I do expect more from an experienced and savvy minister such as Noonan … if he starts bullsh1ttin might be time to revolute ….

@ David O’Donnell

FG/Labour are simply showing that there is a political class for whom the truth is a foreign country.

And it’s a country with whom we are at constant war.

It is a dangerous country – that allows information to be uncensored.

It is a country that must be vilified and slandered at every opportunity.

It is a country that is dangerously unvarnished and and home to facts which are bald.

It must never be spoken of… for fear that the great unwashed learn of it’s existence.

Instead, the FG gobshites tell their mix of fairy stories and horror tales… for in the immortal words of The Invisible Man: “Paddy likes to know what the story is!”

@What Goes Up

Nine point eight metres per second squared – looks like Fine Gael are already on the way down …. should reach an equivalent terminal velocity to Fianna Fail soon enough …

@what goes up

I wouldn’t go that far on Minister Noonan … (yet) …. he is no MickeyXVI

Now were you to pop in Minister Dick_een Bruton …. might give the serfs in the p1ss poor paid secondary labour market a chuckle ….. big deal yesterday with his €10 million pittance to the ‘real productive economy’ ….. while his gov pays out €1,000,000 to an unsecured anglo/inbs vulture in a few days …

@colm mccarthy

It makes me feel very angry that some one has their hand in may trouser pocket.

Not just Government closing ranks….

“DUBLIN, Oct 26 (Reuters) – Irish Bank Resolution Corporation (IBRC), formerly Anglo Irish Bank, began the closing of its $9.2 billion US loan book sale on Wednesday and said it would use some of the proceeds to pay a senior unguaranteed bond maturing next week.
“Receipt of the proceeds will not only allow the bank to repay holders of the bank’s $1 billion senior unguaranteed bond issue which matures on Wednesday November 2, but will also allow the bank to bring about a net reduction in other borrowings, including Emergency Liquidity Assistance (ELA),”

Karl is having difficulty with the language.

I should explain the language is based on a new verrucra addtion to the Orwellian Newspeak language which uses a new term BellyFeelBlackWhite. I know the piece doesn’t use ‘BellyFeelBlackWhite’ but its the language uses a hidden vector pointer to the key which is BellyFeelBlackWhite. When you understand the meaning of BellyFeelBlackWhite, you can better understand the reasoning of the two ministers.

Bellyfeel….the reasoning gives you a good feel in the gut or belly even though the reasoning is false.

Blackwhite….this is where you convince yourself to the point of believing in it yourself that what you say is true, even though it is false. You believe black is white.

The ministers are using the Irish verrucra, BellyfeelBlackWhite version of Newspeak for which there is no cure.

Neither logic or evidence will prove against it:) This is replacing the lingua franca in Ireland previously Anglo Saxon English. It is spreading fast with the evolution of bankocracy as it replaces democracy in Ireland.

You should watch out carefully for examples of this in order not to be gobsmacked.


This propaganda is ongoing since a long time, is it not? It is part of the public perception game, creating a deliberate and heavy distortion of reality, and presenting it as a success.

Leo ‘Wryneck’ Varadkar and others should be ashamed of themselves, but they are not, they are locked in a ideological mindset that they willingly subscribed to, the results are blatant lies, as simple as that.

These lies that are constantly presented to the public are a reflection of behind closed doors secret arrangements, and make it easy for the diligent observer to look through the dense smoke screens.

The politics of burned earth continues, the collateral damage calculated and accepted. The collateral damage are you and I.

Business as usual in Ireland. Sad, really sad!

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