BoA/Merrill note today:It appears that the legislation Ireland has undoubtedly been preparing, originally as abackstop to encourage Anglo Irish investors to accept a coercive and confiscatoryexchange, will now potentially have a “wider application” (to use the terms of the IrishPrime Minister). We take this to mean that subordinated debt holders of Irish bankscould find the market value of their bonds being dictated by a potentially coercive andconfiscatory exchange. Whilst we would expect the stronger banks like Bank ofIreland to haircut less, >>>>uncertainty remains with respect to the valuation of thesubordinated bonds and will likely continue to pressure subordinated bonds,especially the perpetuals<<<<I see no hurry to buy BOI if the above is true. Awaiting further details. Even after that, there should be time to get aboard. Let's hope the worst that can happen is a cpn suspension and/or LLoyds-style Coco exchange offer. So far it has paid to stand aside until the fog lifts.
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