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REO's bond rating cut in uncertain property market

Emmet Oliver Deputy Business Editor The Independent
Treasury, founded by Johnny Ronan and Richard Barrett (pictured), controls almost 70pc of REO. Four years ago, REO issued €375m of bonds through a company called Opera Finance.

Treasury, founded by Johnny Ronan and Richard Barrett (pictured), controls almost 70pc of REO. Four years ago, REO issued €375m of bonds through a company called Opera Finance.


SOME bonds linked to Treasury Holdings' REO property company have now been downgraded to junk status as concern grows over the state of the Irish property market.



Treasury, founded by Johnny Ronan and Richard Barrett, controls almost 70pc of REO and four years ago REO issued €375m of bonds through a company called Opera Finance.

During the week the London office of Standard & Poor's (S&P) downgraded some of the bonds to B, a rating which means that with a change in circumstances there could be a default on these bonds. Other bonds were slashed to BB, also a junk rating, which gives investors what is called "fair protection''.

The majority of the bonds were slashed from AAA to A, a drop of five notches, which is a large deterioration in terms of credit quality. This rating means that a change in the economic climate could affect the prospects of these bonds.

 


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