Anglo Irish offers to exchange subd debt at 20c/euro

DUBLIN, Oct 21 (Reuters) - Anglo Irish Bank offered to exchange some 1.6 billion euros ($2.23 billion) of subordinated debt at a discount of 20 cents per euro as the nationalised lender sought to scrape back some capital.

Anglo, brought under state control last year, will force bondholders that don't take up the offer to accept just one cent per 1,000 euros to redeem their floating notes due 2014, 2016 and 2017, the bank said in a statement on Thursday.

The Irish government said last month that its bailout of Anglo could cost up to 34 billion euros ($47.5 billion) under a worst-case scenario and reiterated its call that subordinated bondholders in the bank would have to share the pain.

(Reporting by Padraic Halpin; Editing by Toby Chopra) ($1=.7181 Euro) Keywords: ANGLOIRISHBANK/BONDS ([e-mail]; Reuters Messaging: [e-mail]; [phone]) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.