# Anglo Nationalised: what does this mean & what is the significance/consequence of it?



## z106 (15 Jan 2009)

Anglo has just been nationalised.

In lay mans terms what does this mean and what is the significance/consequence of it?

I know it means the state now owns it?
But what exactly does that mean?

That the government is now also a part time bank as well as running the country?


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## Guest124 (15 Jan 2009)

*Re: Anglo has been nationalised*

Excellent News - however they better not keep dropping the interest rates.


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## Afuera (15 Jan 2009)

*Re: Anglo has been nationalised*

Interesting to see that they are going to compensate the shareholders. I wonder what they'll end up paying for the shares of what was essentially an insolvent bank?


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## smiley (15 Jan 2009)

*Re: Anglo has been nationalised*



Afuera said:


> Interesting to see that they are going to compensate the shareholders. I wonder what they'll end up paying for the shares of what was essentially an insolvent bank?




I would say the shareholders (myself being one) will get a huge big '0'. But i have no problem with that, as that is the name of the game.

A lot to be said for the statement 'Do not put in what you cannot afford to lose'!!!

How many billions has Sean Quinn and his family lost??? Bloody hell.


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## zag (15 Jan 2009)

*Re: Anglo has been nationalised*

Government statement here - [broken link removed]


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## Guest124 (15 Jan 2009)

*Re: Anglo has been nationalised*

Customer's will get a letter in the next few days. Any chance of a loyalty bonus for savers? (could you imagine the outcry)


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## PaddyW (15 Jan 2009)

*Re: Anglo has been nationalised*

According to the goverment statement, shareholders will be compensated.


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## smiley (15 Jan 2009)

*Re: Anglo has been nationalised*



PaddyW said:


> According to the goverment statement, shareholders will be compensated.




Romantic idea, but what will we get?? Lollipops?


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## zag (15 Jan 2009)

*Re: Anglo has been nationalised*

We might get shares in Anglo . . . they're going cheap.

z


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## smiley (15 Jan 2009)

*Re: Anglo has been nationalised*

The government are for it. Cowen is finished. What a mess. The builders party has bankrupt the Country.


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## PaddyW (15 Jan 2009)

*Re: Anglo has been nationalised*



smiley said:


> Romantic idea, but what will we get?? Lollipops?



Lollipops and maybe a rice krispie bun if you've been really good!


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## tosh100 (15 Jan 2009)

*Re: Anglo has been nationalised*

Why would the Government compensate shareholders? They invested in a company that has now failed. Why waste money on compensation?


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## Afuera (15 Jan 2009)

*Re: Anglo has been nationalised*



tosh100 said:


> Why would the Government compensate shareholders? They invested in a company that has now failed. Why waste money on compensation?


Perhaps Quinn needs a dig out?


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## smiley (15 Jan 2009)

*Re: Anglo has been nationalised*



tosh100 said:


> Why would the Government compensate shareholders? They invested in a company that has now failed. Why waste money on compensation?



Even as a shareholder i agree. They shouldnt, but im sure there are plenty of ff members that have shares and interests in anglo.


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## PaddyW (15 Jan 2009)

*Re: Anglo has been nationalised*

An assessor will be appointed to see if the bank is worth anything now. If there is no worth, there will be no compensation, however if the assessor determines that the bank is of some value, compensation will be made, however low that is. So says Mr. Lenihan.


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## Nomansland (15 Jan 2009)

*Re: Anglo has been nationalised*

Lads,
What are the consequences (if any) for the Quinn group with respect to the money borrowed to cover Quinns stake in Anglo? I am extremely nervous at the moment as I have (and my mother) savings in Quinn Life via their freeway funds. Are these under any threat?


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## smiley (15 Jan 2009)

*Re: Anglo has been nationalised*



Nomansland said:


> Lads,
> What are the consequences (if any) for the Quinn group with respect to the money borrowed to cover Quinns stake in Anglo? I am extremely nervous at the moment as I have (and my mother) savings in Quinn Life via their freeway funds. Are these under any threat?



have a search on aam. This topic was covered somewhere before. Perhaps Brendan or somebody else can clarify the answer to this


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## Duke of Marmalade (15 Jan 2009)

*Re: Anglo has been nationalised*

Enda Kenny looking like real hero.


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## j26 (15 Jan 2009)

*Re: Anglo has been nationalised*

What will happen to the workers in Anglo?


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## z109 (15 Jan 2009)

*Re: Anglo has been nationalised*

I presume all of Anglo's debt is now considered part of the national debt? And it's assets are now state assets?

The EGM tomorrow will apparently just open and close, according to Gavin of gavinsblog.com (http://www.thepropertypin.com/viewtopic.php?p=187187#p187187)


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## paddyd (15 Jan 2009)

*Re: Anglo has been nationalised*



j26 said:


> What will happen to the workers in Anglo?



nothing (for now at least), according to the ministers press release.


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## TonyD (15 Jan 2009)

*Re: Anglo has been nationalised*

How much more have the government taken on in debt.?

I believe it could be billions more.


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## G Allon (15 Jan 2009)

*Re: Anglo has been nationalised*

Seems like good news that Anglo has been nationalised.  But, bit alarmed to hear George Lee wonder why so many depositors have taken out their money in the past few weeks.  Are deposits still safe?


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## smiley (15 Jan 2009)

*Re: Anglo has been nationalised*



G Allon said:


> Seems like good news that Anglo has been nationalised.  But, bit alarmed to hear George Lee wonder why so many depositors have taken out their money in the past few weeks.  Are deposits still safe?



they were before the announcement this evening and if anything they are even safer now.


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## extopia (15 Jan 2009)

*Re: Anglo has been nationalised*

I took money out of Anglo out of disgust. Morally I couldn't justify keeping an account at a bank where the management were involved in concealing director loans from shareholders. I'm sure I wasn't the only one who felt this way.


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## Afuera (15 Jan 2009)

*Re: Anglo has been nationalised*

Have the government effectively turned Anglo into a zombie bank by doing this? It still has a huge amount of organizational issues to sort out and I'm not sure the interbank market are going to be able to trust it regardless of who is underwriting it.


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## j26 (15 Jan 2009)

*Re: Anglo has been nationalised*



paddyd said:


> nothing (for now at least), according to the ministers press release.



But are they part of the public service pay bill now???


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## ajapale (15 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*



qwertyuiop said:


> ..........That the government is now also a part time bank as well as running the country?.......



The government was a part time bank not so long ago before it privatised ACC and ICC banks.


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## webtax (15 Jan 2009)

*Re: Anglo has been nationalised*



TonyD said:


> How much more have the government taken on in debt.?



The whole kitchen sink. So much for the idea of keeping Anglo on life support until the guarantee ran out and then leaving the bondholders to take the hit...


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## putsch (15 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

When I read today that the new candidate for CEO was an internal guy - someone who'd come up within the flawed system and who'd clearly done well within it and I assume hadn't rocked any boats - I felt a bit sick - that there'd be no real change - wonder if that had any impact on the decision.

To agree with an earlier poster - I had a lump sum for which Anglo had the highest rate - I wouldn't put my money there - moral disgust. I can't feel so much sympathy for the staff as I normally would - did they not know what was going on.....


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## z109 (15 Jan 2009)

*Re: Anglo has been nationalised*



Afuera said:


> Have the government effectively turned Anglo into a zombie bank by doing this? It still has a huge amount of organizational issues to sort out and I'm not sure the interbank market are going to be able to trust it regardless of who is underwriting it.


No, BoI and AIB are about to become zombie banks by being recapitalised to the tune of x amount of their share value.


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## Afuera (15 Jan 2009)

*Re: Anglo has been nationalised*



yoganmahew said:


> No, BoI and AIB are about to become zombie banks by being recapitalised to the tune of x amount of their share value.


Is there anything to suggest that AIB or BoI won't be able to function properly though after they are recapitalized?


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## danash (15 Jan 2009)

*Re: Anglo has been nationalised*



smiley said:


> The government are for it. Cowen is finished. What a mess. The builders party has bankrupt the Country.


 

Do you work for Anglo ? Did the builders just walk in and take the money from the counter ?


I have no connection with FF.


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## Carramore (15 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

IMHO, this is (relatively) good news from the tax-payers' perspective. On the reasonable assumption that Anglo is hopelessly bust, in that a significant proportion of its "assets" (probably including some of the Directors' loans) are worthless, the government can now let the current batch of shareholders lose all their money in the first place. Then it can allow the holders of subordinated debt (€4.9 billion worth of them) which are not covered by the guarantee scheme go under before it has to start coughing up. Under the earlier proposal, the government's €1.5 billion would be swallowed up before the bond-holders were exposed. Mind you, I believe that the bank is so hopelessly insolveny that it will cost the tax payer more than €1.5 billion to make good on its promise of not leaving depositors exposed but at least it will have got the bond-holders to pay the €4.9 billion before it has to pay up.


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## z109 (15 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*



Carramore said:


> IMHO, this is (relatively) good news from the tax-payers' perspective. On the reasonable assumption that Anglo is hopelessly bust, in that a significant proportion of its "assets" (probably including some of the Directors' loans) are worthless, the government can now let the current batch of shareholders lose all their money in the first place. Then it can allow the holders of subordinated debt (€4.9 billion worth of them) which are not covered by the guarantee scheme go under before it has to start coughing up. Under the earlier proposal, the government's €1.5 billion would be swallowed up before the bond-holders were exposed. Mind you, I believe that the bank is so hopelessly insolveny that it will cost the tax payer more than €1.5 billion to make good on its promise of not leaving depositors exposed but at least it will have got the bond-holders to pay the €4.9 billion before it has to pay up.


My understand is that subordinate debt is covered by the guarantee. It is only equity or equity-like instruments that are not covered.


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## Carramore (15 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Even if such debt were covered by the guarantee scheme, the fact is that none of it matures before September 2010 and so the guarantee will have expired by the time these bond-holders can come looking for their money.  Ergo, they are not covered by the scheme


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## theresa1 (15 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Domino effect - we may end up with just one Bank and how ironic if it's Anglo Irish Bank.


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## Romulan (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

I'd like the Govt. to immediately call in any and all of the "old" directors loans please.


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## PaddyW (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

And then sack the lot of them.


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## Strathspey (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Does this mean that Ireland is effectively bankcrupt to the tune of €80Billion?


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## PaddyW (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Is this basically a strategy to keep Anglo on life support, in order to keep the big two afloat?


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## Sunny (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

I think it was the right thing to do but once again the Government does everything in its power to come across as not having a clue. Some of the statements coming out of Cowan and Lenihan beggers belief. "Its business as usual". "The bank is in good stead and solvent". Dear God!

My favourite is the Lenihans excuse on why they won't reveal Anglo's bad loan situation claiming it is "commercially sensitive information". Complete and utter tripe. Every bank is expected to reveal their bad debts. Problem was the market didn't believe Anglo's and they were obviously right not to considering the Government will now not reveal the real figure. Also how can it be commercially sensitive? Is Lenihan saying that Anglo will continue to compete with BOI and AIB? Anglo is finished and as taxpayers we have the right to know what exactly we have signed up for.


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## dewdrop (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

For such an important development I feel some of the early posters were a bit flippant and some comments were appropiate for Letting off Steam. Perhaps that is what they were doing. For my part I have one simple question which is the appoximate range of riske to the taxpayer. I have a sinking feeling it could make our present fiscal problems seem little


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## Sunny (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Just looking at market reaction to the move. Irish Sovereign CDS spreads ranging from 265-280bps this morning after closing yesterday evening at 225bps so as expected Ireland is taking a hit. Has anyone read the actual Bill? I am assuming it will be similar to the one used in the UK for Northern Rock and will follow that model


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## z109 (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*



Carramore said:


> Even if such debt were covered by the guarantee scheme, the fact is that none of it matures before September 2010 and so the guarantee will have expired by the time these bond-holders can come looking for their money.  Ergo, they are not covered by the scheme


Em, no.

Now that the government has nationalised Anglo, the debt is due on the government's account. 

The other banks have issued a fair amount of debt under the guarantee scheme which all has a due date of before the end of the guarantee. There is also the issue of debt that is due to rollover this year and next year.


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## Sunny (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*



yoganmahew said:


> Em, no.
> 
> Now that the government has nationalised Anglo, the debt is due on the government's account.
> 
> The other banks have issued a fair amount of debt under the guarantee scheme which all has a due date of before the end of the guarantee. There is also the issue of debt that is due to rollover this year and next year.


 
Exactly. There is no question of any debt investor of Anglo's taking a hit anymore unless Ireland defaults with the possible exception of any Tier 1 instrument holders.


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## smiley (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Is there a legal case here to sue the former directors for breach of fiduciary duty???

I sense shareholders would very much like their pound of flesh.


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## Faltermeyer (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Getting away from the consequences for the economy etc for a moment, is the general feeling that, barring moral reasons, it is safe/ok to place money in Anglo Savings accounts?

I opened a Premium Demand & Regular Saver in November and was planning(before the announcement) to go into them today to lodge money/start the regular saver working...


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## Raskolnikov (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

*Anglo Irish Chairman O’Connor Says Bank Not Being Wound Down*

By Fergal O’Brien

Jan. 16 (Bloomberg) -- Anglo Irish Bank Corp. Chairman Donal O’Connor said the aim of the nationalization is to “preserve” the lender. The bank is not being wound down, O’Connor told shareholders at an extraordinary general meeting in Dublin today.


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## Angloman (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Does anyone know what is actually happening to the shareholders rights in terms of the ownership of shares. I mean, I am a shareholder and I am wondering if I am treated under current company law rules as having *legally* disposed of my shares. Does anyone know the answer?


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## Mayo1969 (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

I know its been kind of dealt with here already, but just wondering what exactly does nationalisation of Anglo Irish mean for shareholders when the bank is suspended on Stock Exchanges - Does that mean the shareholders effectively have no interest anymore in the bank or that however worthless their shares were previously they are even moreso now?

Also, since we are now all, as taxpayers, effectively shareholders of Anglo Irish, can we expect a full disclosure some time soon of the extent of its lendings and to whom and the security or not of these lendings?

Finally if the Govt does decide (unlikely I would expect) to call in the bank's loans from its major debtors, what is the possibility of them seizing or putting a stay order on their assets, I'm sure Mr Fitzpatrick has a pleasant amount of personal wealth and assets that could be appropropriated to cover some part of his €87 m debts. I imagine that would actually hurt him more than going to jail.


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## Purple (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

I heard some government person on the radio (sorry, didn’t catch who it was) saying that one of the reasons for nationalising Anglo Irish was to safeguard the 1500 jobs there. If that’s the reason then it would be far cheaper to just give each employee €2 million and let the bank fail.


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## GeneralZod (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Assuming bad debts of €15 billion why did the Government willingly add €3500 for every man, woman and child in the country to the national debt.  Why is that money well spent? Is this being done so that loans to Anglo from foreign banks can be repaid?


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## tyoung (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

AS Yoga and Sunny said, the main beneficaries of this move are the holders of long term Anglo debt. This now as secure as Irish government debt but with a much higher coupon. Anybody got any idea what it's trading at this AM?
BTW as the SBPost noted Sean Fitz is a big holder.


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## GeneralZod (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*



tyoung said:


> the main beneficaries of this move are the holders of long term Anglo debt.



Sorry but terms like "tier 1 instrument holders" doesn't mean anything to me.

Who are they? Other Irish Banks or foreign banks or something else?


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## Kemo_Sabe (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

a pedantic point: why is this and the other Anglo threads in this credit crunch forum?

their failure had very little to do with the credit crunch and an awful lot to do with bad management, bad regulation and bad government


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## tyoung (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Kemo Sabi
An old fashioned bank run forced the government's hand.
With regard to the status of the bond holders this is straight from the minister's statement
"Creditors (including bondholders) of Anglo Irish Bank can be assured that it will continue to service its obligations and will repay its debts at maturity."
This is the same as in the US where the main beneficaries of the Freddie Fannie/AIG bailouts have been the bondholders.


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## Kemo_Sabe (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

thanks tyoung but my question still stands; this bank's failure was as a result of the collapse of the Irish property bubble not the credit crunch

this was a homegrown disaster and FF, IFSRA and the Central Bank allowed it to happen. I don't like to see askaboutmoney implicitly supporting the lie that this was due to 'international factors beyond our control' by placing the discussion threads in the Credit Crunch forum.

this may seem pedantic but there is a real reason for it per the above.


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## Duke of Marmalade (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

I thought one of BL's strangest comments was, when asked why not liquidate Anglo, because that would let debtors off light. First of all I doubt whether that is correct but what a skinny reason for putting the national finances on the line.


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## Carramore (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*



yoganmahew said:


> Em, no.
> 
> Now that the government has nationalised Anglo, the debt is due on the government's account.
> 
> The other banks have issued a fair amount of debt under the guarantee scheme which all has a due date of before the end of the guarantee. There is also the issue of debt that is due to rollover this year and next year.


 
this is in danger of becoming a private argument between myself and yoganmahew.  However, there's a little matter of whether or not we as taxpayers can be saved €4.9 billion by getting bond-holders to stump up before we are on the hook.  

I still think that my analysis is correct.  The fact that the government is now the shareholder does not change the fundamental issue of limited liability.  In the precedent of the UK government's nationalisation of Northern Rock, the holders of subordinated bonds are completely exposed.

It appears that both of me and yoganmahew are ignorant of the true situation, are there any financial experts out there who can tell us if the bond-holders are now exposed before the government has to cough up additional money?


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## webtax (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*



GeneralZod said:


> Is this being done so that loans to Anglo from foreign banks can be repaid?



It was interesting to hear Lenihan on Newstalk saying that the nationalisation was showing that Ireland is a country that pays it's debts.

If he is doing this to try & protect Irelands international reputation he is very misguided.


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## z109 (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*



tyoung said:


> An old fashioned bank run forced the government's hand.


Do you really think it was a run on deposits? If so, what is the Central Bank (lender of last resort) for? Should we not just close it down and let Finance do its work? It'd save us a packet!

I don't believe the run on deposits story. I don't know what it is, but I know what I don't believe however many times it is said. Same as I didn't believe that Anglo was solvent or the guarantee a good idea. Saying don't make it so.

(Not having a pop at you tyoung, as this is the reason that is being given out - I am hoping either for a confirmation or some other explanations).


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## Oracle (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Xx


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## tyoung (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Yoga,
 Obviously I don't know either.
It might have been the cheapest option at least in the short run.
I take it that the 1.5B already promised wasn't going to be enough. Given that Anglo has, what, 100b in deposits, guaranteed by the state, and it's main assets are a bunch of illiquid property loans on which it has admitted that it's rolling up the interest, any sort of run on deposits would mean the government was staring into a black hole right now instead of( say) 6 months from now. It's clear the government don't want to call in Anglo loans and collapse that house of cards. Something might turn up!.  It's pretty clear we're making it up as we go along.


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## barryl (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Did BL say tonight on six one news that anglo had assets of 4b after liabilities or did I take it up wrong?


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## GeneralZod (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

It was new Anglo-Irish chairman Donal O'Connor that made that highly dubious claim I believe. The same report mentioned that the market capitalisation before the shares were suspended was €166 million.


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## Purple (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*



GeneralZod said:


> It was new Anglo-Irish chairman Donal O'Connor that made that highly dubious claim I believe. The same report mentioned that the market capitalisation before the shares were suspended was €166 million.


 Big drop from €13 billion...


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## messyleo (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*



barryl said:


> Did BL say tonight on six one news that anglo had assets of 4b after liabilities or did I take it up wrong?



That is assuming it's assets aren't bad loans of course.


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## mathepac (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

Based on what (informed ?) commentaters are saying, we won't know the answers to the questions posed in the thread title for some time, despite a variety of reports, studies and speculation.

The Minister has just appointed yet another bunch of Pontius Pilates to examine Anglo's books and listening to the Minister and God Help us, Gormley, on the wireless today, I have little confidence that we, the new owners of Anglo, have the information or the leadership to turn it around.

Speculate away folks, but at the end of the day its still speculation.


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## horatio1 (16 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*


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## CorkGuy12 (17 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*



gravitygirl said:


> That is assuming it's assets aren't bad loans of course.



Indeed - have a look at: [broken link removed]
(page 9 gives the run-down)

Reading that, nothing seems wrong. everything looks wonderful! Pretax profits of €784m (Year ended 30th September)

But there's €72 billion in loans out to customers, whose ability to pay became the real question, especially when one sees the ghost estates around the country.

I suspect a few extremely wealthy clients, pulled their deposits/asset management portfolios when the government announced a 75% stake, so anglos ability to even look at writing off some bad debts started to be a doubt.

Incidentally, I own some anglo shares!  I briefly caught a mention on TV, I think it was Shane Ross who gave a figure of the percentage of Anglo that is owned by small investors - anybody get the figure?


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## barryl (17 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

lets say hypothetically that what BL says turns out to be true,and anglo have assets of 4b over liabilities,will this (after costs) be divided between shareholders?


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## z109 (17 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

timod, he said that 80% of shares were owned by shareholders with shares worth less than 1k euro.

I think his logic (and his figures) may be a little fault.
- we know Quinn owns about 15%
- we know there are other insitutional investors
So I doubt the 80%

On the other hand, if you bought shares at 17 euro, and bought 77k euro of them, you would have had shares worth 1k when they were nationalised, so it may be that 80% of shareholders used to have a decent (small) pile of shares which became near worthless, which is now worthless.


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## barryl (17 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*



yoganmahew said:


> timod, he said that 80% of shares were owned by shareholders with shares worth less than 1k euro.
> 
> I think his logic (and his figures) may be a little fault.
> - we know Quinn owns about 15%
> ...


 Nobody knows at this point if they are worthless or not


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## webtax (17 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

One question on the issue of compensation:

The Chairman of Anglo was saying yesterday that the assests exceed the liabilities by €4bn. Lenihan is saying the bank is solvent and is open for business as usual, that all it has is liquidity problems and he wanted to put clear water between it and the old management. Also, he is stating that it doesn't have a problem with non-performing loans and that it is generating enough income to cover it's liabilities (a highly dubious claim, given that it hasn't written down it's 'assets' to realistic levels yet).

So... if the bank is a going concern then it has a net book value of €4bn (in simplified terms). Either the compensation should be at this level for shareholders or the Chairman & Lenihan are being economical with the truth?
How else can they explain the gap between €4bn net asset value and the likely compensation of nil? Clearly the bank has failed and is on life support.


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## barryl (17 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*

If there is compensation who pays it ,anglo or the government?


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## darag (19 Jan 2009)

*Re: Anglo Nationalised: what does this mean & what is the significance/consequence of*



Duke of Marmalade said:


> I thought one of BL's strangest comments was, when asked why not liquidate Anglo, because that would let debtors off light. First of all I doubt whether that is correct but what a skinny reason for putting the national finances on the line.


Funnily enough that comment caught my attention over all the others.

Here is the comment:


> The clear priority for us is to collect the debts and not to encourage debtors in an attitude that they don't have to pay their debts because in some sense the bank is being wound up. That is why that I am making it very clear that this bank is going to be run on proper commercial lines and loans have to be collected.


This suggested to me that BL doesn't understand what he is doing.

It reminded me of the person who posted a question on AAM a few months ago asking whether they still have to repay their mortgage if the bank who issued it went bust; the question was laughed at by a number of posters.

Yet BL seems to believe that in some way, debtors get off lightly when a bank is wound up.  If anything it is the opposite; the purchasers of loans will have little or no interest in maintaining a "relationship" and are likely to turn the screws much more readily to squeeze the debtors.


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