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Nov, 2010

Preparations for a new four-year state solidarity bond will accelerate after the upcoming budget and is expected to be launched in mid-January, The Sunday Business Post reports.

The bond will follow the ten-year solidarity equivalent launched last May, which has seen €300m invested in it so far. Individuals can invest between €500 and €250,000 in the bond – they can accumulate the minimum amount by making regular lodgement of at least €25 until they reach the minimum amount.

The national recovery plan has mooted the latest shorter-term bond because the 10-year bond was considered too long a timeframe for many investors.

“Accordingly, it is intended to launch a new four-year solidarity bond shortly with a similar structure to the ten-year bond,” the plan stated.

All things being equal, the returns are guaranteed to be an awful lot safer than Bank of Ireland shares, where investors have taken another bath on the latest rights issue, which was launched only six months ago, according to Richard Curran in The Sunday Business Post.

“Investors who bought new shares last June are already nursing a 52% fall in the value of their investment,” Curran notes.

The prognosis for a likely recovery in the share value is not good, given the likelihood the bank will require further capital injections from the Government, which in turn will dilute the value of individual shareholdings still further.

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