LONDON (Reuters) - Nationalised lender Anglo Irish Bank cleared the first major hurdle in its closely watched debt restructuring when a group of subordinated creditors agreed to take an 80 percent write-down on the value of their holdings.
Despite resistance from some noteholders, threatening to block any deal causing big losses, the necessary majority of bondholders voted on Monday to accept an exchange offer on 750 million euros ($1.0 billion) of floating rate notes due 2017.
Creditors holding about 690 million euros of those bonds agreed to exchange their debt for new notes and cash, Anglo Irish Bank ANGIB.UL said. Bondholders that reject the offer, to be settled on Wednesday, will get 1 euro cent per 1,000 euros of notes held.
The exchange offer was the first in a series of key creditor votes enabling Anglo Irish Bank to make holders of 1.6 billion euros of subordinated debt bear losses — a method watched by other troubled institutions such as Irish Nationwide Building Society IRNBS.UL.
The Irish government has said subordinated bondholders of the two lenders would have to foot part of the bill to clean up the banks, although it has so far ruled out penalising senior creditors.
Anglo Irish Bank will hold votes in late December for the exchange of subordinated bonds due 2014 and 2016. A group of investors in the 2016 notes, claiming to hold a blocking stake in the bonds, could yet derail these exchanges.
(Reporting by Sarah White; Editing by Dan Lalor)
$1 = 0.7284 euro