Bank of Ireland PIBS

Mr Kempster, 73, owns permanent interest bearing shares (Pibs) that BoI wants to force him to sell at just 20pc of their cover value as part of a restructuring of the financial institution\’s balance sheet by the Irish government.

The former farmer, who also used to run a courier company, will claim in the High Court on Wednesday that the terms offered by BoI are \”unfair\” to retail investors.

Mr Kempster is not the only investor likely to take a hit. Some £75m of the bonds are outstanding – meaning Pibs investors are facing a total loss of up to £60m.

OK, as Ritchie says about Greece, those who lend money irresponsibly should indeed take a haircut when their irresponsibility comes home to roost.

Mr Kempster, who lives in Glasgow, only bought £24,000 worth in 2009.

That\’s the bit that interest me though. What price did he pay for them?

By 2009 we all knew that BoI was bust didn\’t we? So I assume, although don\’t actually know, that he bought the bonds at less than par.

If true, this makes him a vulture investor doesn\’t it?

3 thoughts on “Bank of Ireland PIBS”

  1. “If true, this makes him a vulture investor doesn’t it?”

    Yes, yes it does. And? Have they actually declared bankrupcy?

    If/When they do, the receivers/courts can force him to take pennies in the pound. Until then, he’s providing an important discipline: Prove you can’t pay up, or pay up.

  2. Actually, it’s quite possible he didn’t pay less than par. I have £1,000 nominal of this issue, bought at the beginning of 2010 for £1,030 plus costs. In ’09, I expect the price was even higher.

    However, that’s not the point. The Irish government, for it is they who are driving this scandal, have up-ended capital structures and overturned legally-binding contracts in an attempt to preserve taxpayers’ investment at the expense of bondholders’. Those of us who bought during the crisis were expecting the Bank to be in trouble but we were expecting the Irish State to behave within the law. They’ve decided that the law can go hang, and that’s what needs challenging.

  3. Managed to get onto a price website; my expectation, it transpires, was wrong for most of ’09. The price was higher for the earliest bit of ’09, followed by quite a collapse and then a recovery towards the end of the year. Notwithstanding, the issue is as my second paragraph states.

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