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AIB and IL&P backed Anglo fundraising
08 November 2009 By David Clerkin, Markets Correspondent
AIB and Irish Life and Permanent (IL&P) struck a deal to provide support to a major fundraising programme on behalf of Anglo Irish Bank at the end of September, The Sunday Business Post has learned.
Regulatory filings in Britain revealed that Anglo granted charges to AIB and IL&P in respect of Anglo Irish Covered Bonds, a British-registered special purpose vehicle established in 2007 to source up to €10 billion in funding on behalf of the recently nationalised bank.
The documents showed that AIB and IL&P were granted a charge over certain assets of the Anglo vehicle on September 29, just a day before the end of Anglo’s financial year.
Anglo issued a statement on September 29 announcing that it would change its year end reporting date to December 31.
Both AIB and IL&P are described in the documents as ‘‘new secured creditors’’ following an undertaking agreed between the two banks, Anglo and a number of other parties.
The filings do not disclose the extent of any credit exposure held by AIB or IL&P to Anglo.
Anglo’s accounts for the half-year to March disclosed that loans of €7.7 billion had been transferred to Anglo Irish Covered Bonds, a limited liability partnership that forms part of the Anglo group’s consolidated accounts. These loans were used to secure bonds issued under the bank’s covered bond programme, a form of raising finance using commercial loans as security. All three banks declined to comment on the details of the transaction.
This newspaper previously reported that the government lined up AIB and Bank of Ireland to prop up Anglo with emergency funding of up to €8 billion in the weeks running up to the ailing bank’s nationalisation in January.
Anglo’s funding profile has come under severe pressure since the onset of the credit crunch. It received emergency funding from the ECB and the Central Bank of Ireland of more than €10 billion at the end of March, the date of the ailing bank’s most recent financial statements.
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