anglo meetings/emails

8/9/2019 Anglo meetings/emails

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FOI Request Reference: 122/2009Schedule of Records: Summary of Decision Making:

11 Series of emails.Mr. Brian Finn, Assistant Principal,D/Finance & Mr. MK, Anglo Irish Bank.

7 Release

21 Letter from Fiachre O'Neill, Anglo IrishBank to Mr. Tony Smyth, D/Finance.11/12/08. Re: Government Guarantee -Anglo Irish Mortgage Bank.

1 Release

22 Letter from Mr. Fiachre O'Neill, AngloIrish Bank to the Ministerfor Finance reAnglo Irish Mortgage Bank. 11 /12/08

1 Release

24 Minute of meeting between D/Financeofficials, Mr. Padraig O'Riordan, ArthurCox Solicitors andMr. Sean F itzpatrick,Mr. Michael Jacob, Mr. William McAteer,Mr. David Drumm, Anglo Irish Bank.12/12/08

3 Release

25 Email from Mr. David Drumm, AngloIrish Bank to Mr. KevinCardiff,D/Finance. Attachment:Draft CapitalPlan. 13/12/08.

3 Release

32 Series of em ails. Mr. William B eausang,Ms. Ann Nolan, Mr. KevinCardiff,D/Finance; Mr. Fiachre O'Neill, AngloIrish Bankl8/12/08. Subject: Legal.Attachments: "ckl247 initialdiligencelist";"DoF letter to Chair 18 December 2008."

6 Part Release S28 (IXa)PersonalInformation

As above As above


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33 Letter from Mr. KevinCardiff, D/Financeto the Chairman, Anglo Irish Bank.18/12/09

4 Release

41 Internal D/Finance emailfrom Mr. TonySmyth to Ms. Ann Nolan, Mr. AidanCarrigan, Mr. W illiam Beausang, AssistantSecretary. 24/12/08. Subject AngloLiquidity.

1 Part Release The redactedpart of thisrecord isoutside thescope of thisrequest.

58 Email from Mr. EoghanDuffy, D/Financeto Mr. Ciaran McArdle, Anglo Irish Bank.08/01/09. Subject: Meeting yesterday.

1 Release

63 Email from Mr. Fiachre O'Neill, AngloIrish Bank to Mr. Tony Sm yth, D/Finance.08/01/09. Subject: Anglo Irish BankCorporation pic - foreignoffices andMortgage Bank.

1 Part Release S28 (l)(a)PersonalInformation

83 Letter from Mr.Kevin Cardiff to Mr. DonalO'Connor, Chairman, Anglo Irish Bank.15/01/09.

1 Release

84 Letter from Mr. Donal O'Connor, AngloIrish Bank to Mr. Kevin Cardiff,D/Finance. 15/01/09.

1 Release

87 Email from Mr. John Paul Coleman, AngloIrish Bank to Mr. Colm O'Neill, Mr. TonySmyth, Ms. Marie Mulvihill, D/Finance.20/01/09. Subject: Perpetual Bonds notCovered by the Guarantee. Attachment:"Note".

2 Release


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IN SE RT D EP T.OF FINANCE HEADER

ROADMAP FOR COVERED INSTITUTIONS

PART A

The Scheme

Principles and Aims of Scheme

Scheme Requirement/Power

Th e primary p urpose of the S cheme is to maintain and safeguard the stability of thefinancial system in the State. The provision of financial support in the form of aguara ntee to certain credit institutions or subsidiaries of credit institutions is intendedto achieve this primary purpose. The manner in which the Scheme is beingimplemented is intended to support the long-term sustainabilityof the banking systemin the State.

The stabilityof the financial system in the State is crucial to the stability and grow thof the overall econo my of the S tate. To this end, the Minister intends that steps takenby covered institutions to implement the Scheme will help promote sustainablelending practices to appropriately support balanced economic growth.

Paragraph 2of the Scheme sets out the detailed objectives laid down by the Minister.

Paragraph 36of the Scheme allows the Regulatory Authority, in consultation with theMinister, to regulate the co mm ercial conduct of the covered institutions to ensurecompliance with the objectives of the Scheme. Paragraphs 36 to 44 of the S chemccontain further details in this regard.

Part B of this Road map reflects some initial, specific requirements from the M inisterin relation to paragraphs 36 to 44of the Scheme.

Covered Institution Required Action

By the end of Nove mb er, individual covered institutions will be required to issue areport to the Minister on what steps they have taken/will take and what procedures

they are putting in place/have put in place to support the principles and secure theachievementof the objectivesof the Scheme.

In particular, covered institutions will be required to describe to the Minister whatsteps will be/have been taken under the following headings:

Promotionof sustainable lending practices;

Controlling asset growth;

Securing long-term funding;

Improving capital ratios;

Updating the valuationof assets;

Ensuring that the costof the guarantee will not be passed on to custom ers;


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Controlling exposures to customers or asset classes;

The strengtheningof managem ent capacity and corporate governance.

Covered institutions will be expected thereafter to prov ide mo nthly reports to theMinister that describe progress made in complying with the principles and objectivesof the Scheme, the requirements of paragraphs 36 to 44 of the Scheme and specificdirections issued by the Minister in connection with the Scheme . The FinancialRegulator will also hav e information requirements which will be requested from thecovered institution separately.

PARTESpecific objectives and directions

Board of Directors


Paragraph 32 requires covered institutions to appoint one to two public interestdirectors from a panel selected by the M inister (panel directors). The public interestdirectors will be advised to the covered institutions.


Each institution is to ensure that there is capacity on its Board of Directors for up totwo Panel Directors to be appointed.

the Minister will notify the covered institutions whether one or two Pane lDirectors are to be appointed.

the Panel Director(s) are required to be appointed to the boardsof the coveredinstitutions (or to be appointed pending approval by the shareholders, ifrequired).

Observers on Committees


Paragraph 32 of the Schem e gives the Minister the pow er to appoint observe rs to siton certain committeesof the covered institutions

Based on the assessmen t of the reports discussed at paragraph I above as they arereceived, the Minister will notify the institution as to which com mittees it will requ irean observer to be appointed to.


The minu tes of all meetings of such com mittees are to be sent to the FinancialRegulator.


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By the endof Nov emb er, each c overed institution, or the parent acting on its behalf, isto produce a report to the Financial Regulator and the Minister, and meet with theFinancial Regulator and the Minister, listing these committees and detailing the

operations, regularityof meetings and "termsof references'Vparameters and any otherrelevant procedures relating to such committees. In particular the report shouldhighlight the priority tasks and responsibilities of the relevant com mittees over thenext six mon ths and how in specific terms their work supports the achieveme ntof th eobjectivesof the Scheme.

4. Remu neration Plan


Paragraphs 46, 47 and 48of the Schem e provide for the establishmentof the CoveredInstitution Remuneration Oversight Committee (CIROC), require each covered

institution to prepare a plan to structure the remuneration pack age s of the directorsand executives so as to take into accountof the objectivesof the Act and require eachcovered institution to submit a report to CIROC demonstrating how its remunerationpolicies for the year ahead will comply with paragraph 47.

The Minister expects to appoint the membersof CIROC soon.


Covered institutions should prepare their remuneration reports to be forwarded toCIROC by 5 December 2008.

5. Dividends


Paragraph 42 of the Sche me requires covered institutions to com ply w ith directionsgiven by the Minister as regards the declaration and paymentof dividends.

Covered Institution Restrictions

No covered institution to declare or pay dividends until further notice. The m atterwill be reconsidered periodically.

6. Buy-BacksScheme Requirement/Pow er

Paragraph 43of the Schem e precludes covered institutions from buyin g back ordinaryor other shares.

Covered Institution Restrictions


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7. No covered institution shall buy-back any of the securities (either debt or equity),which form part ofit s capital without the prior approval of the Financial Reg ulator.Funding

Scheme Requirement

Paragraph 39 requires covered institutions to comply with asset/liability targets.

Covered Institution Restriction

No covered institution to raise any funding (other than through deposits) without priorconsultation with the Minister and the Financial Regulator.

No covered institution to publish a prospectus, or instruct corporate finance advisorsor other financial advisers in connection with a fundraising, without prior consultationwith the Financial Regulator and the Minister.

Covered institutions will also be required to comply with the termsof Guidance NoteNo. 6 when it is issued by the Financial Regulator in relation to prospectuses and offerdocuments.

8. Public Disclosure

Scheme Requirement/Powers

Paragraph 36 permits the Minister in consultation with the Regulatory Authority toregulate the commercial conductof the covered institutions to ensure the achievementof the objectivesof the Scheme.


A covered institution which intends to make any public disclosure as regards itsassets, (including v alua tions, light dow ns or right offs) and/or liabilities other thanthose required in the o rdinar y course of business, will consult in advance with theFinancial Regulator and the Minister.

Without prejudice to disclosu res m ade in prospectuses and other offering documents,no covered institution shall o therwise exp licitly prom ote itself on the basis of theScheme.

9 Lending practices


Paragraph 36 permits (he Minister in consultation with the Regulatory Authority toregulate the commercial conduc tof the covered institutions to ensure the achievementof the objectivesof the Scheme.


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In light of the objectives of the Schem e, covered institutions should report by end-month on their current practices and objectives in relation to the promotion ofsustainable lending practices to promote balanced economic growth.

10. Corp orate Social Responsibility


Paragraph 4 5 of the Schem e contains a requirement for the covered institutions toprocure that the Irish Banking Federation submit a b-annual report on CoiporateSocial Responsibility.


The covered institutions should initiate arrangements at this time with the IrishBanking Federation for the preparation of the first bi-annual report.

11. Interba nk depo sits


As highlighted in the Minister's letter of 22 October 2008 covered institutions 'recourse to interbank deposits with a maturity up to three months must be balancedand proportionate with overall funding need s so as to ensure consisten cy w ith theman agem ent of liquidity by the Eurosystem and compatibility with the operationalframework of the Eurosystem.


Covere d ins titutions should report on their com pliance to date with this aspect of theScheme by mid-November.

12. Com plianc e Certificate


Paragra ph 27 of the Schem e requires that covered institutions provide the R egulatoryAutho rity w ith com pliance certificates every qua rter from: (i) its auditors; and (ii) itschairman andchief executive jointly, confirming comp liance with allof the terms andobjectivesof the Scheme.


A form of com plianc e certificate will be provided to the covered institution byMonday 10 November, which will be required to delivered to the Minister by the [lastday] of each quarter. This certificate will be in addition to the [monthly] reportingdetailed at paragraph 1 above.


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13. Scheme interpre tation issues

Covered institutions sh ould ad vise the Department as soon as possible of any issuesthat come to their attention relating to the interpretation of the Schem e in respect o fwhich further guidance m ay be required (e.g. by investors, credit rating agencies).

14. Risk management of the guarantee

The S cheme confirms there will be timely payment of any valid claim under theguarantee to enhance the market acceptability of the guarantee arrangem ent. In orderto minimise the risk of any claim being presented for payment each coveredinstitution should report on the risk management arrangements in place to guardagainst a default even t occ urring.

15. Directions

The Minister will issue d irections that will be publicly available in respect of thefollowing:

Dividends;

Buy-Backs;

Funding;

Appointmentof Directors to the Board.

Following receipt of the information discussed at paragraph 1, or earlier if required,the M inister may issue further directions generally, or specifically to institutions, inrespect of such matters.


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Stephen Court

18/11 St Stephen's Green

Dublin 2

Ireland

Tel:+353 I 6162000

SWIFT: AngolE2D

Website: wwwangloirislibank.com

Fax: Bantong +3S3 I 61624 81

Fax: Treasury + 353 I 6162467

Fax. Personal Savings + 353 I 6162483

Fax. Personnel + 353 I 6162488

Mr Tony SmythDepartment of FinanceUpper Merrion StreetDublin 2

11 December 2008

Dear Tony

Government Guarantee - Anglo Irish Mortgage Bank ('Mortgage Bank')

I refer to our previous discussionsin relation to the above.

Please find enclosed a letter addressed to the Minister requesting that now that theMortgage Bank has been granted a banking licence that it be included as a coveredinstitution within the me aning of the Credit Institutions (Financial S upport) Scheme2008.

If you should have any queries in relation to the above, please do not hesitate tocontact me.

Yours sincerely

Fiachre O'Neill

Head of Group Compliance, Legaland TaxDirect: 01 616 2336

cc: Mary McKeon, Department of FinanceMary-Elizabeth Donoghue, IFSRAMatt Moran, Ang lo Irish Bank

D i r i C t ^ i : Uui P ftcfcrcJ; Qatasm. D w i i K . D n r > a i C f i f b t M t ^ t i r B ii di Ss w .N o i! i b a n k{US},Amu 1.1 I w j t jr , * t d o e l j o t , Vi ' i ' i s i i A . I t , : A u . e , G a ; ; M . C ; i vsDcr. i f O C oniKv. Dcdan Q j i l l iga i : . I' -' cd S t i l t s


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- l i l fi iw " 'Jv> tMI IK V M ^u la uu i t [ II I

Stephen Co urt Tel: +353 I 6I620C

18/21 St Stephen's Green SWIFT: AngolE 2D

Tel:+353 I 6162000 Fax: Banking +3S3 I 6162481

Fax:Treasury + 353 ! 6162467

Dublin 2

Ireland

Website: vww jnglo tnsh ban k com Fax: Personal Savings + 353 I 6162483

Fax: Personnel + 353 I 616248 8

Mr Brian LenihanMinister for FinanceDepartment of FinanceUpper Merrion StreetDublin 2

11 December 2008

Dear Minister

Government Guarantee - Anglo Irish Mortgage Hank ('Mortgage Bank')

I refer to discussions withofficials of your Department and the F inancial Regulator.

The Mortgage Bank is a licensed Irish bank which is wholly owned by the Anglo IrishBank Group ('Grou p'). It will issue Irish commercial m ortgage covered securities tothe market under the Ass ets Covered Securities Act 2007. By so doing the M ortgageBank w ill improve the Grou p's access tofunding, increase the investor base availableto the Group and over the longer term will reduce the Gr oup 's costof funding.Overall, this should assist in the reductionof the Gro up's liquidity and funding risk.

At the timeof determining th e institutions and subsidiaries to be designated ascovered institutions under the Credit Institutions (Financial Support) Scheme 2008('Sch em e'), we were still in the processof seeking a banking licencefor the MortgageBank and therefore, it was not included. Now that a banking licence has been granted,I hereby request that the Mortgage Bank be included as a covered institution withinthe meaning of the Scheme and a Ministerial Order to thateffect issued.

Should you require any further information, please do not hesitale to contact me.

Yours sincerely,

Dimete r ; : Sc-r r il U f v j * D.vic K D-utliii Clikf I ai ['..~iu.lv...U.V It^r.vei-li fUSl./jwI rfeniiy. IV . W jai:ob.VViJlaiii Ar -kAiocr i>..i> l'kG .:i"P-jm l O'Ccwirof, rw br , Outllig.il!,Med Sullivan. Pat Wnslar..

Registered Office: Itephor Court. I Bi lI St Stepten's Green, Dublin 2, Ireland Registered in Ireland! No 2i(MVAnglo Irish Bank Corpora tor pi cis regulated bj- the financial Regulator tn (reUnd.

Fiachre O'NeillHead of Group Compliance, Legaland TaxDirect: 01 616 2336


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Meeting with Anglo12 December 2008

Present: Finance: Kevin Cardiff, Padraig O'Rio rdan . Tony SmythAnglo: Sean Fitzpatrick, Michael Jacob, William McAteer, DavidDrum

DD Stated that Anglo Board met on the 11th December 2008 to consider the Banksposition in relation to the share price and decided that the bank w as not in aposition to correct the situation on its own and that needed assistance from theState.

The meeting w as adjourned to allow a delegation from the board to meet withthe Departmentof Finance (KCardiff and Ann N olan) to ask for Stateassistance, and following that meeting they went on to meet with the CentralBank and Financial Regulator.

He stated that the y had told the CB that they will require 2.5 bn in ordinaryand preference shares to reach T ier1 Capital of 8:5%. The G overnorof the CBsupported by Tony Grimes suggested that 3 bn would be required

The Anglo Board reconvened today prior to this meeting , and concluded that

a direct m arket a ppro ach , by the bank itself, to raise capital will not wo rk inthe current situation. He reiterated that Anglo needs Government help andasked for State assistance to underw rite an open offer.

SF indicated that the curren t situation in relation to share price is not sus taina bleand that the bank will have liquidity problem s in the short-term if the ma tteris not addresses.

DD indicated that there is a need to chang e the approach and for the State to beinvolved in the process. He asked for State involvement (underw riting) in anopen offer which they feel sure private investors and shareholders will beinterested in and will invest in Anglo. Both he and WMcA indicated that therewas clear signs of European and American interest and the investors jus tneeded to see "the deal" underwritten by the State. DD indicated that Stateinvolvem ent was critical to this process and the absenceof State involvement,in the current climate, served only to create uncertainty and fear that an yinvestment w ould be diluted by subseq uent State involvement. The ydescribed it as a "chicken and egg " situation. He indicated that they feel thatthey felt confident that they could rise between 1- 1.5 bn from privateinvestors.

K.C. Stated Go ver nm ent lias indicated its intent to protect the ban king systembased on certain principals

1. Th e State will not any financial institution failif that will give rise tosystemic failure in the banking system


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2. State involvement will protect taxpaye r's interests and have regard to legal

and EU implications.

The particular mo deof Government response has to be considered, and thereis need to assess the pros and cons of different approac hes. State inv olvem entis not the same as private investment and there is a who le rangeof legal, andEU constraints which have to be addressed. Further, there may be a need forlegislation and in such case a need for prior Governm ent approval. The m oneyinvolved is sizeable, there are opportu nity costsfor the State, and it has toconsider involvement as an investment rather than simply a cost on the State.Further w e must consider whether a full blown recapitalisation is theappropriate approach orif another typeof approach is required. He alsoindicated that that the needsof other institutions need to be considered and any

approach would have to be on an industry wide basis. He indicated that theissues would be considered and would go to the Min ister and Tao iseach,probably over the weekend.

He raised the issueof "timing" and the implicationsof the requirements ofCom pany Law (21 days notice for EG M etc) and the timeline required iflegislation etc was required.

SF Drew a distinction between the actual process es required by law and forlegislation etc which hav e defined timelines and so me formof statement ofintent and commitment based on which a deal can be put together.

DD Offered to provide an outline An glo 's views on what the deal should look likeand undertook to supply a "term sheet" by email to KC by midday Saturday.The trustof the term sheet would set out a central them e and the issues w hicharose from that.

KC Indicated that that would be helpful but it should be understood that theDepartment had to consider a comprehensive rangeof options, the need toprov ide an industry solution rather than on for A nglo and unlike privatebusiness there are a whole rangeof other constraints including, political,legislative and EU which had to be consideredHe asked if the Anglo Board would need to signoff on this "term sheet towhich DD answered no.

KC w ent on to ask what the Anglo Boa rd's assessmentof the situation is ,docs it consider the position sustainable, has the Board considered the businessplan and how has it reacted to the Financial Regulator's comments and whatthe Boards response will be. Finally, what happensif you do not put theCapital in?

DD indicated that this information can be provided . 11c then returned to the issueof the Stale underwriting theoffer and the levelof private participation thatAnglo would attract, l ie added that Standard Life will sub-underw riteif Anglocan get a commitment on Government underwriting

KC expressed the view that the State will end up with mostof it. He enquired howlong it would take Standard Life to do due diligence


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SF Indicated thai due diligence would take circa 48 hours. He ackn owled ged thatthey need to prove that they can get a substantial partof the funds required andthat they need to bridge a credibility gap between Finance/FR and Anglo'sthinking.

DD Needed to know the time frame for Government response.

KC indicated that there was considerable work to be done. In termsof timeframehe would like to have the work done with time to spare. However, thepotential for an early decision is dependant on the timing and nee ds of otherinstitutions, and not all pieces are in place yet. There is also the need to getMinister and Government approval and the process through the Oireachtas -involving considerable dialogue and explanation, as the political system needsto be behind any process.

He reiterated again that the Government is committed to supporting thebanking system and that the Government will not let a Bankof systemicimpo rtance fail.. He stated that he was not in a position to ind icate w hat formthe support would take or conditions might apply. He indicated that there isconsiderable work to be done across a whole rangeof options. The Ministerwill have to be briefed, ma ke the decision and take the proposa l toGovernment.

Anglo are to forward the "Tem p she et" on Saturday


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Capita] Scenarios Page 1 of 1

Card i ff , Kev in

F r o m :

S e n t :

To:

Subject:

David Drumm [daviddrumm@angloirishbank re]

13 December 2008 13:57

Cardiff, Kevin

Capital Scenarios

Attachments : Draft Capital Plan.doc

Kevin I attach a very brief paper on potential plans to increase capital ratios.

This is very high level and I wo uld app reciate an opportunity to d iscuss this in more detailwith you, and in particular to understand how the Government would view potentialstructures etc.

As we discussed on the phone earlier, the media reports this morning have unfortunatelyput us in a very difficult position. Accordingly we are keen to get clarity as soon as possibleon how matters might proceed.

D raf t Cap ital P !an .d ocKind regards

David

David D r u m m

Group Chief ExecutiveANGLO IRISH BANK+353-1-616-2003

Privale, Confidential and Privileged. This e-mail and any files and attach men t transmitted with it are confidential and/or privileged They are intendedsol ely for the use of the intended recipient The content o f this e-mail and any file or atlachmenl transmitted wilh it may have been changed or alteredwithout the consent of the author If you are not the intended recipient, please note thai any review, dissemination, disclosure, alteration, printing,circu lation or transmission o f this e-mail and/or any file or attachment transmitted with it. is prohibited and may be unlawful If you have received thise- ma il 01 any file or attachment transmitted wilh it in error please nolify Anglo Irish Bank Corporation Pic, Stephen C ourt, 18/21 Si Slephe n's Green.Dubl in 2, Ireland, telephone no: + 353-1 -616 2000

Directors: S P FilzPatrick (Chairman). D Drumm (Chief F .xccuiivc), I. Diadshaw. O O'Connor, A Heraty, M D Jacob, W A M cAteer. G McG inn. D

Quilligan. N Sullivan. P Whelan. N Harwerth ( U.S.)Registered Office: Slcph en Con n, 18/21 Si Stephen's Green, Dublin 2 Ireland

Registered in Ireland No 220-15

A ng lo Irish Bank Coipo ration pic is regulated l>y Hie financial Regulator Ang lo lush Bank Corporation pic (trading as Anglo Irish Hank PrivaleIDankiiig) is regulated by the Financial Regu lator. An glo Irish Assura nce Comp any l imited rs regulated by (he Financial R egulat or

13/12/2008


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Draft - For Discussion Purpo ses O nly

Re-Cap italisation Scenarios for Anglo Irish Bank

Existing Core Regulatory Ca pital Ratios

* Core 5.5%

4. Core Including Prefs 6%

Add Back General Pro vision s 6.7%

Notw ithstanding strong existing capital levels, and robust loss absorption ca pabilityfrom future underlying profits, m arke ts are now looking for core ratios in the range of7.5% to 8.5%

J jAnglo will internally gen erate circa 70 - 80 bps per year in core cap ital, allowingfor


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(I) Buy back of Tier One Bonds

2.2 Billion

1.1 Billion

0.3 Billion

0.8 Billion

90 bps

raised from a rights issue:

Total Outstanding

Buy back (say) 50%

Cost (trading at 20c - assume 30c)

Profit

Addition to Core Capital

This leaves 110 bps to 210 bps to be

(2) Fully Underwritten Rights Issue

Amount

Comprising

Ordinary Shares

Preference Shares

Underwriting

Timing

! Billion to 1.8 Billion

50% Ordinary Shares / 50% PreferenceShares

Issued at Current M arket Price pari passuWith existing outstanding shares.

Market Rate CouponMarket Conversion RightsCompany right to redeem within

specified term w ith redemp tion premiumStructured to rank as Core Tier OneCapital S

Fully underwritten by Government withminimum 50% sub-underwrite fromInstitutional Shareh olders ^

Announce W/'E December 19lh .Prospectus mailed W/E December 26l h

EGM Mid January-Close and Fund mid February.


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Page 1 o f 2

Behan , Anne

Fro m: Bea usan g, William

Sen t: 18 December 2008 23:16

To: Nolan, Ann; Cardiff, Kevin

Su bje ct: FW: Legal

Attachments : ck1247initialdiligencelist.doc; DoF letter to Chair18 December 2008.doc

for info

From: Beau sang , W illiamS e n t : 18 December 2008 23:16T o: 'Fiachre O'Neill'

C c: Baldock, Henrietta (IBK EMEA); 'Matthaeus, Andreas (IBK EMEA)'; 'Brendan McDonagh'; 'CormacKissane'; 'Padraig ORiordain'S u b j e c t : RE: Legal

Fiachre

Pl ea se find attache d a s discu ssed letter and sch edu le faxed over relating to due diligence starting tomorrow.

I'm a d v i s i n c ^ h ^ ^ i s ^ o m eof which I un de rst an d will be involved in the work tomorrowof your mobilen u m b e i ^ f m i ^ l ^ i n .order to c o- ord in ate a rr an ge me nts .

You mentioned that it would b e possib le to acc es s your building other than through the front e ntran ce etc.

If any issues arise please don't hesitate to contact me.

R e g a r d s

William

From: Fiachre O'Neill [mailto:FiachreO'Neill@AN GLOIRI5HBA NK.ie] S e n t ; 18 December 2008 22:24T o: Nolan, Ann; Beausang, WilliamS u b j e c t : Legal

Ann, William,

As requested we have accelerated the pulling togetherof the legal information outlined in your letter ofD ec em be r 16. While I hav e not spok en to you r legal advisor, we are still working on this andI believe weshou ld b e in a position to provide the information by early tomorrow afternoon.

If you nee d further information, ple ase let m e know .

Regards,Fiachre

Fiachre O'NeillHead of Group Compliance, Leyyl and TaxAnglo Irish Bank Corporation pic

Direcl : +353 1 6 16 23 36Mobile

www . aggl oirishba n k. com

17/02/2009
mailto:FiachreO'[email protected]:FiachreO'[email protected]


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Private, Confidential and Privileged. This e-m ail and any files and attachments transmitted with il are confidential and/or privileged 1 hey are intendedsoicly for the use of the intended lecipicni Th e content of tins e-ma il and any file 01 attachment transmitted with it may have been changed oi alteredwithout the consent o f the author If you are not the intended recipient please note that an> review, dissemination, disclosure, alteration, printing,circulation or transmission of this e-mail and/or any file or attachment transmitted with it is prohibited and may be unlawful. If you have received thise-m ail or any file or attachment transmitted with it in eiror please notify An glo Irish Bank Corporation Pic, Stephen Court, 18/21 St Stephen's Gr een.

Dublin 2, Ireland, telephone no: +353-1 -6162000

Directors: S !' FitzPatrick (Chaiunan), D Drumm ( Chief l-'xecutive). L Bratlshaw. D O'Connor A Heiatv, M D Jacob, W A McAteei', G McGann DQuilligan, N Sullivan, P Whelan, N Harweilh ( U.S.)

Registered Officc. Stephen Court 18/21 St Stephen's Green. Dublin 2 lieland

Registered in lieland: No 22045

An gl o Irish Bank Corporation pic is regulated by the Financial Regulator An glo Irish Bank Corporation p ic (trading as An glo Irish Bank PrivateBan king) is regulated by the Financial Regulator Ang lo Irish Assurance Company L.iniiled is regulated by the Financial R egulator

I 7 / 0 2 / 2 0 0 9


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RecapitalisationAgenda for Preliminary Due Diligence M eetings

1. Strategy

Discussion with management on current trading, financial projections and material issuesfacing the business, not in the public domain

Review of business plan preparedfor Financial Regulator and institution's own 3 year plans

2. Loan portfolio

2.1 Identify any material changes since PWC reports (November and December 2008) forGovernment.

2.2 Identify any material changes in valuesof underlying security and any new valuationsprovided

2.3 Discussion on material non-performing loans

3. Fu nd ing and liquidity

3.1 What are the immediate funding requirements and identify any impactof any changeof control.

3.2 Discuss the Bank's liquidity position and outlook, with reference to current levels ofcash, eligible securities and key regulatory and other liquidity ratios.

3.3 Provide the maturity profile of the Bank's wholesale funding and proposed so urceand costof refinancing.

3.4 Comment on current and planned utilisation of ECB repo facility, including thecompositionof already-repo-ed assets and residual capacity to access the facility.

3.5 Provide an overviewof the current levelof customer deposits, split by term structureand retail versus corporate and discuss recent trends in inflows/outflows, as weli aspricing strategy.

3.6 Comment on current and expected levels and cost of interbank and short-termfunding.

3.7 Any material comm ents onfunding not disclosed to the Central Bank.

4. Capital

Any material changes to the Bank's capital position or likely capital requirements in (heimmediate future

5. Tre asu ry assets and struc tured credit portfolio

5.1 Provide a summaryof the Bank's portfolio of treasury assets and derivatives at thelatest possible date, split by principal asset class, rating and vintage and highlightingany exposure to US sub-prime, CDOs, CLOs, leveraged loans, monolines, CDPCsand conduits.

CIW095.I


20/33

5.2 Comment on any losses inclined YTD or expccted to be incurred in FY08 in relationto the Bank's treasury portfolio (including losses relating to Lehman, Wamu,Icelandic banks).

5.3 Provide the weighted average mark for the principal asset classes, and comment onthe valuation methodology (market price vs mark to model).

5.4 Provide information on any large or on watch counterparty exposures.

Accounting

6.1 Comment on any significant issues or differencesof opinions raised by the Bank'sauditors at the last audit review.

6.2 Comment on any recent or expected significant changes to accounting policy.

6.3 Comm ent on any deficit in the Bank 's pension scheme, and any expected fundingrequirements/increase in contributions.

6.4 Identify any proposed reclassification of assetsfor accounting purposes.

6.5 Management letter, internal control reports or board reports issued by the auditor andresponse.

Legal

7.1 Respond to queries raised in letter issued by Department on 17 Decem ber.7.2 Any defaults or likely default on the pariof the Bank under any material contract.

7.3 Employment contractsfor senior executives.

7.4 Share options and share schemes.

7.5 Any material correspondence with non-Irish regulators.

7.6 Detailsof material litigation or threatened material litigation.

Other

8.1 Comment on any recent rating agency discussions or actions, and any indications onlikely future rating actions and the impact this would have on the business and itsfunding.

8.2 Comment on any expected management or board changes.

5.3 Comment on any expected significant changes to the business or forthcomingannouncements.

5.4 Copies of all board minutes since1 September 2008.

8.5 Copies of all financial and legal advice provided to the Chief Execu tive, Finance

Director, the Chairman or the Boardof Directors8.6 Detailsof any material loans to, or financial arrangements with, directors and senior

executives.


21/33

Identify non-core assets that could be availablefor disposal.

Any other material information that, on the basis of the utmost good faith, oughtreasonab ly to be disclosed to an underwriter


22/33

STRICTLY CONFIDENTIAL

18 December 2008

ChairmanAnglo Irish Bank Corporation pic,Stephen Court,18/21 St Stephen's Green,Dublin 2.

Dear Chairman

1 enclose a schedule setting out our requirements for the preliminary due diligencemeetings which must be undertaken on an accelerated basis in respect of the State'sproposed recapitalisation initiative.

I have asked our advisers (Arthur Cox, Merrill Lynch and PWC) to discuss thequestions set out in the schedule with your senior management as soon as possible. Iwould appreciateif you would ensure that they are assisted in every way possible andthat senior managem ent with sufficient expertise and respon sibility are available tomeet them to discuss these issues.

We would like to complete this initial due diligence exercise at the earliest possibletime so that we can continue to advance the recapitalisation initiative.

Copies of all relevant documentation should be provided in a data room acccssible forreview by our advisers as soon as possible.

Yours sincerely.

Kevin Cardiff,Second Secretary


23/33

An Roinn AirgeadaisDepartmen t of Finance

SrSid Mhurrfean Uacht,

Baile Alba Cliath 2,

Eire.

Upper Mei rion Street,

Dublin 2,Ireland

Telephone: 3 53- 1 67 6 75 71

Facs imi le 353- 1 67 8 9 93 6

LoCall 18 90 66 10 10

VPN. 8109

http :// Www.irlgov ierf inan ce

STRICTLY CONFIDENTIAL

18 December 20 08

ChairmanAnglo Irish Bank Corporation pic,Stephen Court,18/21 St Stephen's Green,Dublin 2.

Dear Chairman

I enclose 3 schedu le selling out our requirem ents for the pre iminary due diligencemeetings which must ba undertaken on an accelerated basis ir respect of the Sta te'spropos ed recapitalisation initiative.

I have asked our advisers (Arthur Cox, Merrill Lynch and PWC) to discuss thequestions set out in the schedule with your senior management as soon as possible. 1would appreciateif you would ensure that they are assisted in every way possible andthat senior managem ent with sufficient expertise and responsibility are available to

meet them to discuss these issues.

We would like to complete this initial dut diligence exercise it the earliest possibletime so lhat we can continue to advance the recapitalisation init ative.

Copies of all relevant documentation should be provided in a duta room accessible forreview by our advisers as soon as possible.

Yours sincerely.

Kevin Cardiff,Second Secretary
http://www.irlgov/http://www.irlgov/


24/33

RecapitalisationAgenda for Preliminary Due D iligence M eetings

Strategy

Discussion w ith managemen t on current trading, financial projections and material issues

facing the business , not in the public domain

Review of business plan prepared for Financial R egulator and institution's o wn 3 year plans

Loan portfolio2.1 Identity any material changes since PWC reports (Novem ber and Decem ber 2008) for

Government.

2.2 Identify any material chang es in valuesof underlying security and any new valuationsprovided

2.3 Discussion on material non-performing loans

Funding and liquidity

3.1 What are the immediate funding requirements and identify any impactof any changeof control.

3.2 Dis cus s the Ra nk 's liquidity position and outlook, with reference to current levels ofcash, eligible securities and key regulatory and other liquidity ratios.

3.3 Provide the maturity profile of the Bank 's wholesale funding and proposed sourceand cost of refinancing.

3.4 Com ment on current and planned utilisation of ECB repo facility, including thecomposition of already-repo-ed assets and residual capacity to access the facility.

3.5 Provide an overviewof the current levelof customer deposits, split by term structureand retail versus corporate and discuss recent trends in inflows/outflows, as well a spricing strategy.

3.6 Com men t on current and expected levels and cost of interbank and short-termfunding.

3.7 Any material comm ents on funding not disclosed to the Central Bank.

Capita)

Any material changes to the Bank's capital position or likely capital requirements in theimmediate future

Treasury assets and structured crcdit portfolio

5.1 Provide a summ ary of the Ban k's portfolio of treasury assets and derivatives at thelatest possible date, split by principal asset class, rating and vintage and highlightingany exposure to US sub-prime, CDOs. C'LOs, leveraged loans, nionolines, CDPCsand conduits.

C16909$ /


25/33

5.2 Com ment on any losses incurred YT D or expected to be incurred in FY 08 in relationto the Ban k's treasury portfolio (including losses relating to Lehm an, W amu ,Icelandic banks).

5.3 Provide the weighted average mark for the principal asset classes, and comment onthe valuation methodology (market price vs mark to model).

5.4 Provide information on any large or on watch counterparty exp osures.

6. Accounting

6.1 Comment on any significant issues or differences of opinio ns raised by the Bank'sauditors at the last audit review.

6.2 Comment on any recent or expected significant changes to accounting policy.6.3 Comm ent on any deficit in the Bank 's pension scheme, and any expected funding

requirements/increase in con tributions.

6.4 Identity any proposed reclassificationof assets for accounting purposes.

6 5 Managem ent letter, internal control reports or board reports issued by the auditor andresponse.

7. Legal

7.1 Respond to queries raised in letter issued by Dep artm ent on 17 Dec emb er.

7.2 Any defaults or likely default on the partof the Bank under any material contract.

7.3 Employment contracts for senior executives.

7.4 Share options and share schemes.

7.5 Any material correspond ence with non-Irish regulators.

7.6 Detailsof material litigation or threatened material litigation.

8. Other

8.1 Com ment on any recent rating agency discussion s or actions , and any indications onlikely future rating ac tions and the im pact this wo uld have on the bus iness and itsfunding.

8.2 Comment on any expectcd management or board changes.

8.3 Comment on any expectcd significant changcs to the business or forthcomingannouncements.

8.4 Copies of all board minutes sincc I September 2008.

8.5 Copies of all financial and legal advice provided to the Chie f Executive, FinanceDirector, the Chairman or the Boardof Directors.

8.6 Details of any material loans to. or financial arrangemen ts with, directors and seniorexecutives.


26/33

Identify non-core assets that could be available for dispos al.

Any other material information that, on the basis of the utmost good faith, oug htreasonably to be disclosed to an underwriter.


27/33

Duffy, Eoghan

Fro m: Smyth, TonySe nt: 24 Decem ber 2008 10:37To : Nolan, Ann, Carrig an, Aidan, Be au san g, WilliamC c: Duffy, Eoghan: Mulvihill, Marie; Kinsella, Sean; Carrigan, Aidan. Thompson, John, O'Neill,

ColmSu bj ec t: Anglo Liquidity

I w as on to Ciaran McArdle from A nglo this morning . He indicated that the liquidity position impro ved marginally byclose of bu sin es s yesterda y (figures to come ). He also indicated that Anglo have put contingen cy p lans in place toensure that liquidity requirements are covered over the holiday period, (up to Jan 2)

t

ll


28/33

Duffy, Eoghan

From:Sent:To :Cc:

Subjec t :

Duffy, Eoghan

08 January 2009 14:[email protected]@angloirishbank.ie;davidhanley@angloirishbank ie;[email protected];brianlynch@angloirishbanks ie, Smyth, Tony, Kinsella,Sean; Mulvihill, Marie; Carrigan, AidanMeeting yesterday

Ciaran,

It w as good to me et with you and c olleag ues y esterday , an d very useful for u s to get the insight into the ban k's liquidityand funding oper ations.

I have been receiving the liquidity informationfrom yourself and your team today, andI think this will work well for our

purposes. Appreciate the time you are giving to thisJust to recap on agreed information exch ange s, mostof which are in train now:- Daily liquidity update reports (8am, 4pm)- Daily funding pack- Nostro cashflows- Group funding upd ates- Details on particular Interbank dep osits as discu ssed

- Interbank and CP costs information- Any significant competitor activity or market ev ents which affect ac ce ss to, or costof funding- Details on developments in discussions with lenders where changeof control clauses will be triggered by thegovernment recapitalisation

Let me knowif I mi ssed anything, orif you have any queries on this.

Regards,

Eoghan

Eoghan Duffy

Financia l Services Divis ion

Depar tment of Finance

Mer r ion S t r ee tD u b l i n 2

P h o n e : 6 0 4 > 0 2 7

1
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


29/33

D u f f y, E o g h a n

Fr om : Fiachre O'Neill [FiachreO'Neill@ANGLOIRISHBANK ie]

Se nt: 08 January 2009 21:50To : Smyth, TonyCc: Duffy, Eog hanSu bj ec t: Anglo Irish Bank Corporation pic - foreignoffices and Mortgage Bank

Tony,

Fur the r t o our conve rsa t io n th is morning, we have off ices in s ix fore ig nj u r i s d i c t i o n s :

1 . The UK ope ra t ions are a branch in accordance wi th Art ic le 25 of Dire ct ive2006/48/EC. This i s usual ly refer red to as "an EU branch" .

Par t ia l ly regula ted by the FSA.

2. Germ any - as UK. Pa r t ia l l y regula ted by the BaFin .

3 . Aust r i a - as OK. Par t ia l ly regula ted by the FMA.

4. Uni te d Sta tes - three representa t ive off ices in Massachuset t s , New York andI l l ino is l icensed by the Federa l Reserve Bank and each Sta te Regula tor.

5 . I s le of Han - a subsid iary l icensed by the Is le of Man Financia l Supe rvis i onC o m m i s s i o n .

6. Jerse y - a branch l icensed by the Jersey Financia l Services Commiss i on.

I a ls o conf i rm our conv ersa t i on that we wi l l launch the Mortgage Bank wi thout the GovtGu ara nte e in p lace , and once the CEBS rules become c learer on the d isc losure forGua ran tor s we wil l look to have the Mortgage Bank included.

Rega rds ,F i ach re

F iach re O 'Ne i l lHead of Group Co mpliance , Legal and TaxAng l o I r i sh Bank Corpo ra t i on p i c

Direct : +3 53 1 616 2336M o b i 1 e : -H

w w w. a n g l o i r i s h b a n k . c o m

* * * * t * t m t*****Akt***************)L************t***i** *****************Private , Conf ident ia l and Pr iv i leged. This e-mai l and any f i les and a t tachmentst rans mit te d wi th i t a rc conf ident ia l and/or pr iv i leged. They are in tended sole ly forthe ujse of the inten ded recipient . The content ot this e mail and any f ile oratt ach men t transm itted wit h it. may have been changed or altered without: the con se nt ofthe author. if you are not the intended recipient, please note that any review,disseminat ion, d isc losure , a l tera t ion, pr in t ing, c i rcula t ion or t ransmiss ion of t hi r.e-m ai l and /or any f i le or a t tachment t ransmit ted wi th i t , i s prohibi ted and ma y b eun lawfu l . :t you hav e receive d this e-mail or any file or a ttac hmen t tr ansmit ted v:ithit in err or please not ify Angl o Irish Bank Corpora tion Pic, Stephen Court , IB/' / 1 rStephen 's Green, Dubl in 2 , I re land, te lephone no; +353-1-6162000.Di rec to rs: D O'C onn or (Chairman), F Daly, A Dukes , A Heraty, M D Jacob, G McGar.n, DQui l l iga n. N Sul l ivan, P Whelan, N Harwer th ( U.S. ) Regis tered Off ice : Ste phen Cour t ,

18/21 St St ephen 's Green, Dubl in 2 I re land Regis tered in I re land: No 22045 Anglo I r i shBank Corporat ion pic i s regula ted by the Financia l Regula tor. Anglo I r i sh BankCor por at i on pic ( t rading as Anglo I r i sh Bank Pr ivate Banking) is regula ted by theFinancia l Regula tor. Anglo I r i sh Assurance Company Limited is regu.1 ated by theF inanc i a l Regu la to r.

1
http://www.angloirishbank.com/http://www.angloirishbank.com/


30/33

An R oinn Airgeadais

Department of Finance

I $ January 2009Srj


31/33

Stephen Co urt Tel.+353 I 6163000 Fax; Banking +353 I 6162481

18/21 St Stephens Green SWIFT. AngolE2D Fax.'Treasury + 353 I 6162467

Dublin 2 Website, www.ang1oirishbank.com Fax Personal Savings * 353 I 6162483l r e , a n d Fax: Personnel + 353 I 6162488

CT*

A . / . - % u h r c .

i ' W

1 5 t h January 2009

Mr Kevin CardiffSecond Secretary GeneralTaxation & Financial Services DivisionGovernment BuildingsUpper Merrion Street,Dublin 2.

Dear MrCardiff,

I refer to your letter dat ed 15 January 20 09 and our m eeting this afternoon.

The board of Anglo Irish Bank Corporation pic has noted the Government's decision s not to pro ceedwith the proposed investment announced on 21 December 2008 and to take the Bank into publicownership. In particular it notes that the Government proposes to pay compensation to the Bank'sshareholders and that all employees will remain employed by the Bank.

I would like to confirm that the Board will work fully with the Gov ernment with a view to ac hieving asuccessful transition and a future as an indep ende nt and commercial Bank under Sta te own ership.

You ha ve a sked that the Board addre ss certain iss ues . First, we have considered th e funding an d theas se ts and liabilities of the Bank and w e confirm that in the contextof the Government's commitmentthe Bank remains so lvent Secondly, while we cannot predict the respons eof our depositors and othercredito rs to nationalisation with accura cy, we confirm our belief that, given all ne ce ss ar y suppo rt, th eBank can remain a viable institution in the contextof nationalisation.

Yours sincerely

Donal O'Connor

Chairman

Cnreclors: Dora! OConnor Ounm. fonr Paiy, Am iVoi, Unc Ktrfih ilCjAmw | Heiair.Mijae:."kfjjnn.Odin Quilligan,Ned Sullivan. Pal Wliot:e-

Regi s te red Off ice : i ngh tn Cow l l . ! i St token's (v et* Outfit 2,


32/33

Page 1 of I

M u l v i h i l l , M a r i e

Subject:

Sent:To:

Cc:

From: John Paul [email protected]]

20 January 2009 16:06

O'Neill, Colm; Smylh, Tony; Mulvihill, Marie

David Hanley; Russell Waide

Perpetual Bonds Not Covered by the Guarantee

At tachmen t s : Note.pdf

Mar ie ,

As discussed as at the 30, h September 2008 (last published accounts) the Bank had 2.835 billion ofperpetual bonds not guaranteed under the scheme.This includes the Banks GBP300million preference shares(371 million at 30, h September).Attached is thenote which will be in the Banks annual accounts showing thisfor September. The note has both dated andundated butI have highlighted the undated (perpetual) bonds.

Any additional information need ed ple ase let me know

R e g a r d s ,

John-Pau l

John-Paul ColemanDebt Capital Marketsighnpaulcoleman(angloirishbank.ieP +353 1616 2885F +353 1616 2461

Anglo Irish Bank18/21 St. Stephen's GreenDublin 2Irelandwww.angloirishbank.ie

Private, C onfidential and Privileged Dirs e-mail and any Hies and attachments transmitted with it are confidential and/or privileged. Th ey are intendedsole ly for the use of the intended recipient The content of this e-mail and any file or attachment transmitted with it may have been changed or alteredwith out the consen t of ihe author. If you arc nol the intended recipient, p lease note that any review, dissemination, disclosure, alteration, printing,circulation or transm ission of this e-mail and/or any file or attachment transmitted with it, is prohibited and may be unlawful. If you have received thise-m ail or any file or attachment transmitted with it in error please notify Anglo Irish Rank Corporation Pic, Stephen Court, 18/21 St S tephen's Green.Du blin 2. Ireland, telephone no: +353-1 61620 00.

Director s D O'Connor (Chairman), I- Daly, A Dukes, 1) Quilligan. P Whelan.

Registered Office: Stephen Court, 18/21 St Stephen's (ireen. Dublin 2 Ireland

Registered in Ireland: No 220-15

Anjjlo Irish Hank Corporation pic is regulated by (he I inancial Regulato r. An glo Irish flank Corporation pic (trading as Anglo Irish Rank PrivateBanking) is regulated by ihe Financial Regulator. Anglo Irish Assurance Company Limited is regulated by the Financial Regulator.
mailto:[email protected]://www.angloirishbank.ie/http://www.angloirishbank.ie/mailto:[email protected]


33/33

Notes to the financial statements continued

39. Other liabilities

Amounts attributable to external unitholderslinked to investment contracts (note 38)

Sundry liabilities

The Group The Bank2008 2007 2008 2007

Cm m m m

77 110

79 65 77 5515 6 175 77 55

40. Subordinated liabilities and other capital instruments

The Group

Dated Loan Capital

7S0m Floating Rate Subordinated Notes 2014 (a)

US$165m Subordinated Notes Series A 201S (b)

US$35m Subordinated Notes SeriesB 2017 (c)

50 0m Callable Floating Rate Subordinated Notes 2016 (d)

7S0m Callable floating Rate Subordinated Notes 2017 (e)

Undated Loan CapitalStg200m Step-up Callable Perpetual Capital Securities (f)

Stg 250m Tier One Non-Innova tive Capital Securities (g). 6 00 m Perpetual Preferred Securities (h)

-fr -J f i^ V s . * ^ -S tg30 0m Non-Cumulat ive Preference^hares(QQ /r - ji rt J & f Q Stg300m Step-up Perpetual Subordinated Notes (j)

600m FixecLfloating Perpetual Preferred Securities (k)Stg350m Fixed/Floating Perpetual Preferred Securities (I)Other subordinated liabilities

O

2 0 0 0

m2007

m

294

36 852 140742 4599516

9

The Bank2 0 0 8

m

37138 5

1

2007

m

72 2 749 722 749

117 115 117 115

25 24 25 24

499 49 9 499 499

749 749 749 749

407424

5,274 2,869 2,976

All subordinated liabilities and other capital instruments issued by the parent Bank are unsecured andsubordinated in the right of repayment to the ordinary creditors, including depositors of the Bank. The prior

approval of the Financial Regulator in Ireland is required to redeem these issues prior to their final maturitydate.

During the year the Group repurchased subordinated liabilities and other capital instruments wi th a nominalvalue of 94m . In addition, o ther subordinated liabilities of 8m m atured during the year.

(a) Tne *.7S0m Floating Rate Subordina ted Motes 2014 bear interest ot three mo nth I.URIBOR plus 0.45%per annum to 25 June 2009 ar.d thereafter ot three m onth FURlHOii plus 0 95% per annum

(b) The US$16Srn Subordinated Notes Series A 2015b e a r interest at 4.71% per annum to28 September 2010 and thereafter reset at three month LlFiOR plus 0.92% per annum

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