Annual Report & Accounts 2009 - Anglo Irish Bank

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Notes to the financial statements continued 42. Subordinated liabilities and other capital instruments continued 106 (e) (f) (g) (h) (i) (j) (k) (l) The €750m Callable Floating Rate Subordinated Notes 2017 were issued on 19 June 2007, and bear interest at three month EURIBOR plus 0.25% to 19 June 2012 and thereafter at three month EURIBOR plus 0.75% per annum. They are callable in whole or in part at the option of the Bank, subject to the prior approval of the Financial Regulator in Ireland, at their principal amount together with any outstanding payments on 19 June 2012 or on any coupon date thereafter. The Stg£200m 8.5325% Step-up Callable Perpetual Capital Securities, issued by Anglo Irish Asset Finance plc, have the benefit of a subordinated guarantee by the Bank, and are perpetual and have no maturity date. The securities bear interest at a rate of 8.5325% per annum to 28 June 2011 and thereafter at a rate of 4.55% per annum above the gross redemption yield on a specified United Kingdom government security, reset every five years. The interest is payable semi-annually in arrears on 28 June and 28 December. The Stg£250m 7.625% Tier One Non-Innovative Capital Securities, issued by Anglo Irish Asset Finance plc, also have the benefit of a subordinated guarantee by the Bank, and are perpetual and have no maturity date. Interest is payable annually in arrears on 23 July at a rate of 7.625% per annum until 23 July 2027, and thereafter at a rate of 2.4% per annum above six month LIBOR, payable semi-annually in arrears on 23 January and 23 July. On 30 September 2004 the limited partners of the Anglo Irish Capital UK LP ('issuer') contributed capital in the form of 600,000 Non-voting Non-cumulative Perpetual Preferred Securities of €1,000 each issued at par, with no maturity date, and with the benefit of a subordinated guarantee by the Bank. The issuer is a limited partnership organised under the laws of England and Wales and its general partner is Anglo Irish Capital GP Limited, a wholly owned subsidiary of the Bank. Cash distributions to the limited partners are payable semi-annually in arrears on 30 March and 30 September. The distribution rate was fixed at 6% per annum to 30 September 2005 and thereafter resets every six months at a rate linked to the euro ten year constant maturity swap, subject to a cap of 9% per annum. No distributions can be paid if the Bank is not in compliance with applicable regulatory capital adequacy requirements. The holders of the 300,000 Non-cumulative Preference Shares of Stg£1 each are entitled to a non-cumulative preference dividend of 6.25% per annum based on a principal amount of Stg£1,000 per share payable annually in arrears on 15 June in each year to 15 June 2015. Thereafter dividends are due to be paid quarterly in arrears on 15 March, 15 June, 15 September and 15 December in each year based on a principal amount of Stg£1,000 per share and on the three month LIBOR rate plus 1.66% per annum. No preference dividends can be paid if the issuer is not in compliance with applicable regulatory capital requirements. Upon any winding up of the issuer these preference shares rank in priority to the ordinary shares in the Bank and equally among themselves and any other present and future Tier 1 capital issues of the Group. Holders of these preference shares are not entitled to vote at any general meetings of the Bank, except in certain restricted circumstances. On 21 January 2009, under the terms of the Anglo Irish Bank Corporation Act, 2009, ownership of the 300,000 Non- Cumulative Preference Shares in issue was transferred to the Minister for Finance. In May 2009 the Bank received correspondence from the Minister stating that dividend payments on these preference shares, including the dividend otherwise payable on 15 June 2009, would be waived until such time as the Minister informs the Bank that dividend payments are to resume. The Stg£300m Step-up Perpetual Subordinated Notes bear interest at 5.25% per annum fixed to 5 October 2015 and thereafter reset at three month LIBOR plus 1.68% per annum. On 29 September 2006 the limited partners of the Anglo Irish Capital UK (2) LP ('issuer') contributed capital in the form of €600m Fixed Rate/Floating Rate Guaranteed Non-voting Non-cumulative Perpetual Preferred Securities issued at par, with no maturity date, and with the benefit of a subordinated guarantee by the Bank. The issuer is a limited partnership organised under the laws of England and Wales and its general partner is Anglo Irish Capital GP Limited, a wholly owned subsidiary of the Bank. Cash distributions to the limited partners are payable annually on 29 September. The distribution rate was fixed at 5.219% per annum to 29 September 2016 and thereafter resets at three month EURIBOR plus 2.20% per annum. No distributions can be paid if the Bank is not in compliance with applicable regulatory capital adequacy requirements. On 1 June 2007 the limited partners of the Anglo Irish Capital UK (3) LP ('issuer') contributed capital in the form of Stg£350m Fixed Rate/Floating Rate Guaranteed Non-voting Non-cumulative Perpetual Preferred Securities issued at par, with no maturity date, and with the benefit of a subordinated guarantee by the Bank. The issuer is a limited partnership organised under the laws of England and Wales and its general partner is Anglo Irish Capital GP Limited, a wholly owned subsidiary of the Bank.
(m) (f) (g) (h) (i) (l) (m) Cash distributions to the limited partners are payable semi-annually in arrears on 1 June and 1 December each year up to and including 1 June 2017, and thereafter quarterly in arrears on 1 March, 1 June, 1 September and 1 December. The distribution rate on the preferred securities was fixed at 6.949% per annum to 1 June 2017 and thereafter resets at three month LIBOR plus 1.39% per annum. No distributions can be paid if the Bank is not in compliance with applicable regulatory capital adequacy requirements. Other subordinated liabilities includes €100,000 A Preference Shares issued by Anglo Irish Asset Finance plc. The European Commission, as a condition of its approval of the Government’s capitalisation of the Bank in mid 2009, required that no further coupon payments be made on any of the Group’s Tier 1 securities following the payment due on the 7.625% Tier One Non-Innovative Capital Securities on 23 July 2009. In September 2009, the Board resolved that the non-cumulative distributions on the €600m Fixed Rate/Floating Rate Guaranteed Non-voting Perpetual Preferred Securities of Anglo Irish Capital UK (2) LP (‘the LP2 Preferred Securities’), which otherwise would have been payable on 29 September 2009, would not be paid. The effect of this decision by the Group was to trigger the ‘Dividend Stopper’ provisions of the LP 2 Preferred Securities, which preclude the Group for a period of one calendar year from and including 29 September 2009, from declaring and paying any distribution or dividend on its ‘Junior Share Capital’, which comprises the Group’s ordinary shares. The Group is similarly precluded, for the same period of time, from declaring and paying any distribution or dividend on any ‘Parity Security’, which comprises the following: 8.5325% Step-up Callable Perpetual Capital Securities issued by Anglo Irish Asset Finance plc on which a semi-annual coupon payment was due on 28 December 2009, and another which would otherwise be due on 28 June 2010; 7.625% Tier One Non-Innovative Capital Securities issued by Anglo Irish Asset Finance plc on which an annual cumulative coupon payment would otherwise be due on 23 July 2010; Non-Voting Non-cumulative Perpetual Preferred Securities issued by Anglo Irish Capital UK LP on which a semi-annual distribution was due on 30 September 2009, and another which would otherwise be due on 30 March 2010; £300m Series A Fixed/Floating Rate Non-cumulative Callable Preference Shares issued by Anglo Irish Bank Corporation Limited; Fixed Rate/Floating Rate Guaranteed Non-voting Non-cumulative Perpetual Preferred Securities issued by Anglo Irish Capital UK (3) LP on which a semi-annual distribution was due on 1 December 2009, and another which would otherwise be due on 1 June 2010; and €100,000 A Preference Shares issued by Anglo Irish Asset Finance plc. Anglo Irish Bank Annual Report & Accounts 2009 107
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Annual Report & Accounts 2009
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Contents Page Chairman’s statemen
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Legacy matters The Bank is continui
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Jim Brydie was appointed Head of Gr
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Business review This business revie
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Divisional lending balances by sect
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holdings, reduced investment cash f
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30 September 2008. Average total cu
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Income statement - treasury impairm
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to acquire these assets they are in
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Board of Directors Donal O’Connor
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In keeping with our environmental p
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Principal risks and uncertainties T
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Credit risk Credit risk is the risk
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Report of the Directors The Directo
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Corporate governance statement On 1
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Corporate governance statement cont
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Independent Auditors' report to the
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Consolidated income statement For t
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Consolidated statement of financial
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Consolidated statement of changes i
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Statement of cash flows For the 15
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Notes to the financial statements I
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Notes to the financial statements c
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Supplementary information Consolida
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www.angloirishbank.com Anglo Irish
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Annual Report & Accounts 2009 - Anglo Irish Bank

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