Irish banks’ senior bonds rose after the nation’s 85 billion-euro ($113 billion) bailout spared holders of the debt from having to share in lenders’ losses.
Bank of Ireland Plc’s 1.47 billion euros of senior floating-rate notes due September 2011 rose 8.25 cents on theeuro to 91.6 cents as of 4:22 p.m. in London, a 10 percent increase, according to composite prices compiled by Bloomberg. The securities fell 7 percent on Nov. 26 on concern senior noteholders were being lined up to take some of the burden of the imminent Irish rescue.
Senior bondholders will escape the cost of the bailout led by the European Union and International Monetary Fund, with holders of subordinated debt forced to share in the pain. Under the agreement, Irish lenders will receive 35 billion euros of the overall package, with 10 billion euros set aside for their immediate recapitalization.
One of the opportunities I was talking about. Still some room left in the trade. Gotta love moral hazard.
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