DUBLIN, Oct 28 (Reuters) - Bondholders in nationalised Anglo Irish Bank are seeking to block the lender's proposed exchange of 1.6 billion euros ($2.2 billion) of subordinated debt at a discount of 20 cents per euro.
Anglo, brought under state control last year, is forcing bondholders that don't take up the offer to accept just 1 cent per 1,000 euros to redeem their floating notes due 2014, 2016 and 2017.
But a consortium of investors who hold about 690 million euros of lower Tier 2 debt are planning to vote against the offer.
'In an astonishing move, Anglo Irish is attempting to strongarm noteholders to vote in favour of the exchange offer by threatening to eliminate minority dissenting noteholders' rights to repayment of monies loaned by them to Anglo Irish,' Brown Rudnick, a law firm representing the noteholders, said in a statement issued late on Wednesday.
'The noteholders believe Anglo Irish's proposal is inconsistent with principles of fair and equal treatment of creditors.'
Ireland faces a bill of up to 50 billion euros to purge its banks of soured property loans and Finance Minister Brian Lenihan said subordinated bondholders in Anglo Irish and other nationalised lender Irish Nationwide would have to make a contribution towards that bill.
Analysts at Glas Securities in Dublin have estimated that Dublin's bill for bailing out Anglo Irish would be cut by 1.65 billion euros if there was a 100 percent takeup of the debt swap and a repurchase of more junior Tier 1 debt also announced this month.
The bondholder meetings to approve the exchange must have a minimum attendance of holders of 66 percent of the notes, three quarters of whom must agree to the changes in order for it to pass.
Subordinated paper in both Anglo Irish and Irish Nationwide have been trading at discounts of around 70 to 80 percent, reflecting impending losses.
The noteholders consortium had made several unsuccessful attempts to meet with Anglo Irish, Brown Rudnick said.
'This is unprecedented and provides for unequal treatment of the minority. We sincerely wish to meet with Anglo Irish to discuss a fair and consensual resolution,' said Louise Verrill, restructuring partner at Brown Rudnick.
(Editing by Carmel Crimmins and David Holmes)
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