Liams Last Post : Irish Sovereign Spreads reach news highs as the pressure mounts...

Good Afternoon ,

It continues to be a horrendous experience to even be near a screen with anything involving Ireland at the moment. Simply put the bubble of credibility has burst for not only Ireland but also the PIG countries with 10 year yield spreads over Germany hitting 457bp for Ireland , 435bp for Portugal whilst Spain maintained a strong credibility factor with spreads of only 194bp. Greece remains in a league of its own with spreads of 861bp

The squeeze became ever more inexorable with the news that Moody's had downgraded Anglo Irish's senior bonds by three notches to Baa3, just above junk whilst Anglo subordinated debt was cut to Caa1 which reflects expectations now of a haircut and full participation in the concept of risk sharing for the Anglo sub debt holders.

The market awaits Brian Lenihan statement re the governments view on the total cost of the anglo bailout. The market waits but prices for the worst.   Bob Peston the famous BBC business correspondent blogged about foreign bank exposure to Ireland. His figures were erroneous though as they include all the foreign banks operating in the IFSC so the total liabilities of Ireland look absolutely horrendous. At this stage there is a straight flight out of Ireland resulting in the huge yield spreads,.

Needless to say the problems in the sovereign debt markets directly impacted perceptions of the Irish Banks with Bank of Ireland trading below the rights issue  price and amazingly underperforming AIB whose plans to sell its M&T stake at a high price were dealt a blow with the news of the demise of the talks between Santander and M&T. It looks like AIB will have to do an institutional placing to get rid of this stake now.

Greencore had a trading statement this morning , the stock did well the continuing operations are performing well. The problem for Greencore is that the rate of re-investment in the USA has been slower than anticipated and the imminent loss of the finance director comes as a blow for those who are looking for an acceleration of acquisition activity as Greencore try to re-invest after the business portfolio re-structuring they have undertaken.

Nothing else was of consequence in Ireland today. It is all about the Sovereign issues. We wait …

Have a good evening ,

Liam

  

 

 

 

 

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Liam Boggan

　

Merrion Stockbrokers

Tel.: 353-1-2404171

Mob:353-87-2313505

www.merrion-capital.com

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