Bank of Ireland Bondholders Organize to Join Effort to Inject Required Capital, to Bolster Planned Capital Raising and to Oppose Announced Liability Management Exercise

New York and London (ots/PRNewswire) -

In response to the Bank of Ireland's (BKIR.I) public announcement
on 8 June regarding its launch of a Liability Management Exercise
(LME), an ad hoc committee currently comprised of over $1 billion of
BOI's LT2 subordinated notes announced its formation. The BOI
Investor Committee, which indicated that it holds sufficient notes to
reject the LME on behalf of nearly all of the Bank's LT2 subordinated
note issues, intends to immediately join discussions with
representatives of the Irish Ministry of Finance and the Bank
regarding efforts to recapitalize the Bank with private funds, which
the LME allows for. If indeed, the BOI Investor Committee's interests
are to be converted to equity, it seeks to convert such interests on
fair terms and to participate in the rights offering along with other
stakeholders. This course of action fully embraces burden-sharing as
it will relieve the Irish government and the Irish taxpayer from the
obligation to make further capital contributions as well as reducing
their exposure to potential future losses that may arise from the
Bank's performance. As a preliminary matter, the BOI Investor
Committee is concerned that, instead of engaging the LT2 investors to
see if a market-based, arms-length solution exists, the Bank, with
the apparent support of the Ministry of Finance, has instead
defaulted to a different path - - yet another tax-payer funded
bail-out that is regrettably premised on the improper impairment of
creditor rights.

While the BOI Investor Committee is committed to engaging on a
consensual basis, it believes that the Bank's LME is fatally flawed
because it fails to respect the fundamental principle that creditors
must be paid ahead of shareholders. The proposal also runs contrary
to opinions expressed by the European Commission in recent
consultative papers on EU banking policy, as well as precedent
established in other recent EU bank restructurings. In particular,
the LME contemplates that BOI LT2 subordinated capital will suffer as
much as an 80% discount while BOI's preferred equity remains
unimpaired and its common shareholders retain significant value. To
force LT2 investors into the deal, BOI is also seeking the right to
repurchase rejecting notes for one penny per EUR1,000 face amount of
notes. The Bank has also indicated that the Finance Ministry will
issue a Subordinated Liability Order (SLO) that would treat the notes
even less favorably, if the LME is not accepted. Such unilateral and
coercive action is a clear abuse of the rish Credit Stabilization
Bill of 2010, and breaches the bondholder contract which is governed
by English law.

As has previously been communicated without response, the BOI
Investor Committee asserts that its own private capital and that of
others is available to recapitalize the Bank without the use of
public funds - a course of action that is consistent with the
commitments that the Irish Republic has given to its External
Partners, the ECB, IMF and EU. It is also the view of the BOI
Investor Committee that fair terms acceptable to all parties can be
achieved that would also respect the claim priorities of the current
capital structure. Such a solution would leave the burden-sharing
ethos of the LME intact while clearly benefitting tax-payers, the
Bank and all of its current stakeholders.

The BOI Investor Committee believes that the BOI and the Irish
Republic represent compelling investment opportunities in their own
right and that their resort to heavy-handed measures as reflected by
the LME and the threatened SLO is counter-productive not only to the
Bank's long-term interests, but also to the ability to attract needed
capital for other Irish institutions. Absent revision, the BOI
Investor Committee will reject the LME and oppose the propriety and
enforceability of any SLO the Finance Ministry may issue. In that
regard, the BOI Investor Committee asks that the Bank and the
Ministry of Finance suspend their announced plans until the BOI
Investor Committee has had reasonable opportunity to meet and attempt
to formalize the terms of a privately-funded solution. If a
market-based solution can be achieved, it will inspire and restore
investor confidence and hasten the ability of the Bank and the Irish
government to return to the international capital markets. The BOI
Investor Committee believes that its willingness to share the burden
of restructuring by converting its debt claims to equity reflects
substantial commitment to that outcome. The BOI Investor Committee is
fully committed to raising the necessary capital by the July 31
deadline that has already been set by the Irish authorities.

Holders of LT2 subdebt wishing to join the BOI Investor
Committee, or having questions regarding the noteholders' rights and
remedies should contact the Committee's counsel, Thomas Lauria or
Stephen Phillips at White & Case LLP.

ots Originaltext: White & Case on behalf of The BOI Investor Committee
Im Internet recherchierbar: http://www.presseportal.de

Contact:
Tom Lauria, White & Case LLP, New York: +1-212-819-2637,
Miami:+1-305-995-5282; Stephen Phillips, White & Case LLP,
London:+44(0)20-7532-1221