Lee Buchheit bondholder email to Department of Finance

In today’s Sunday Business Post, Jack Horgan-Jones interviewed New York lawyer Lee C Buchheit. Buchheit is known as one of the world’s experts on sovereign debt crises. As the article says, he’s “the guy who governments fly in to tell their creditors they won’t be getting their money back”.

In 2010 the Irish government secretly called in Buchheit’s expertise. It was kept secret, according to the article, because if word got out, the markets would know Ireland planned to burned bondholders. In correspondence published for the first time below, Buchheit is shown to be aiding the Department of Finance with drafting legislation that would have allowed for the burning of bondholders.

Buchheit was asked if it would have been possible to restructure the liabilities of the Irish bank to keep the estimated €9bn liabilities from migrating to the shoulders of the Irish taxpayer.

“If you ask me, the answer has to be yes. Come on. We’re not children. The markets are not children. If they think they can jockey the official sector into paying them out, of course they’ll do it. But if they don’t think it’s happening they will restructure. They’ve done it all around the world, forever.”

Thanks to the Sunday Business Post for making the documents available.

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