FSA says BoI bond buy-back falls outside its remit

The Financial Services Authority has told Bank of Ireland bondholders who are protesting against a buy-back offer from the Bank for less than the bonds’ market value that it does not have the authority to intervene in the matter.

The FSA says it has been contacted by a number of bondholders seeking its intervention, but says the issue falls outside of its remit as it concerns an Irish lender and is therefore a matter for the Irish regulator.

On August 24, the Bank of Ireland made a revised offer to bondholders to buy back the 13 3/8% unsecured perpetual subordinated bonds at 40% of their face value as part of a capital-raising exercise.

The FSA says that the bonds are capital instruments and not retail deposits, and therefore are not covered under the Financial Services Compensation Scheme.

In consumer information posted on its website, the FSA says that consumers affected by the buy-back should contact the Bank of Ireland directly or the Irish regulator, the Central Bank of Ireland.