Emergency Legislation Paves The Way For Irish Debt Restructuring

The Irish Bank Resolution Corporation Act 2013 (the “Act”) was enacted in Ireland on 7 February 2013.  This emergency legislation provides for the liquidation of the Irish Bank Resolution Corporation (“IBRC”) which was formerly Anglo Irish Bank, by means of a Special Liquidation Order and the sale or transfer of the assets and liabilities of IBRC.  The Act was drafted as part of a deal with the European Central Bank (“ECB”) that will result in a major improvement in the terms of Ireland’s bank debt.  The Act will also facilitate the termination of certain promissory notes used by IBRC as security to borrow from the Irish Central Bank.  The promissory notes will then be replaced with long-term bonds with a much longer repayment schedule.