Anglo Irish agrees second debt swap

Anglo Irish Bank has agreed a second debt swap with investors following the bailout of Ireland over the weekend, according to the London Stock Exchange.

Investors will now swap bonds maturing in 2017 with floating rate notes due in 2011, reducing the bank’s cost of funding.

The face value of the new bonds is also five times lower than the old ones, meaning investors have accepted a severe voluntary haircut. (article continues below)

The move follows an initial swap with 2016 bondholders, agreed on almost identical terms last Friday.

Ireland’s banks appear to be counteracting concerns that the bailout would not be accompanied by voluntary debt restructuring.

Any major voluntary restructuring would slash institutions’ liabilities without triggering a default.