Irish Nationwide bondholders to discuss options

DUBLIN, Oct 13 (Reuters) - Bondholders of Irish Nationwide Building Society [IRNBS.UL] will discuss this week how to minimise their losses from a government plan to make them share some of the cost of the nationalised lender’s soured property loans.

Bingham McCutchen LLP, a Boston-based law firm, will hold a conference call for Irish Nationwide bondholders on Thursday, and a source close to the bondholders told Reuters on Wednesday that they wanted to discuss what their options might be.

“The aim is to find a consensual solution with the government which would be mutually beneficial,” said the source, who declined to be named because he is not mandated to speak for investors.

“It’s uncertain at this stage what the Irish government is going to do, and the bondholders want to use this period to talk to them ahead of any decision.”

Finance Minister Brian Lenihan said last month that the cost of purging Irish banks of years of reckless lending could top 50 billion euros and that he expected subordinated debt holders in Irish Nationwide and another nationalised lender, Anglo Irish Bank [ANGIB.UL], to make a “contribution” towards this bill.

Subordinated paper in both lenders has been trading at discounts of around 70-80 percent reflecting impending losses, and analysts expect the government to buy back the paper around current market prices.

Lenihan has stressed that only subordinated bondholders in Anglo Irish Bank and Irish Nationwide would have to swallow losses, but he said he would back any attempt by the two banks to renegotiate their senior debt on a voluntary basis.

Lenihan has emphasised that he is opposed to any default on senior debt, but some senior bondholders have been unsettled by his comments and are expected to take part in Thursday’s conference call.

Russian billionaire Roman Abramovich has said he may take legal action over Dublin’s plans to make Irish Nationwide’s subordinated bondholders swallow losses. [ID:nLDE69024P] (Reporting by Carmel Crimmins; Editing by Hugh Lawson)