Try looking through a microscope with a lens cleaned with the rag from the deep fat fryer and you’ll get some idea what it’s like trying to figure out the deal going down in the general insurance market involving Sean Quinn’s businesses.  The result is likely to cost you an additional levy on every single general insurance product you will buy for up to the next ten years – so getting clarity is pretty damn important.  But, despite all the confusion we’ve been through, the dealmakers acting on our behalf seem to have made a pigs breakfast of explaining it, while the media, so far, has been focused on the gossip surrounding the Quinn family and their home.  But what matters most is whether we’ve negotiated the best terms – if we’ve learned anything from structuring bailouts – because the more I squint through the smudge, the less I like what I see:

• The Quinn Group bondholders, who lent the Irish manufacturing, property and financial services conglomerate €1.3 billion, are getting a further guarantee from us consumers through the mechanism of the deal - a tidy €200 million potential extra payback.
• In addition, their annual interest income will jump by a sevenfold margin to an extra €60 million per year, putting the total interest bill at €90 million and threatening to swamp all the expected profits of the group. That means little left over for us.
• To further feather their position, bondholders will swap their contingent guarantees from various Quinn Group subsidiaries for 25% ownership in Group shares, but snaffle the majority of the voting rights.
• Because we’ve no visibility on any side agreements we can’t see if bondholders are prevented from breaking up the business, stripping its assets and selling to the highest bidders.

Does that mean bondholders get the deal of the century and we get nothing? Dunno, what do you think? What about the other side of the deal where Liberty Mutual, a US insurer, is setting up a joint venture with us through Anglo Irish to take over the book at Quinn Insurance? It looks like it secures vital jobs mostly in border areas and should help market competition keeping prices keen – so should we be grateful?

• We’re injecting nearly €100 million of raw cash from Quinn Insurance books across to the new insurer.
• That’s on top of another mountain of money to bolster the reserves against possible claims at three times the industry norm and estimated to be worth a further €200 million.
• For that €300 million we get a minority shareholding and Liberty Mutual get the majority. 

So are our new partners putting hard cash into equity too? See that’s one of the smudgy bits. A figure of €102 million is mentioned, but the coded language surrounding it, makes it look awfully like short-term support to cover the insurance book. In the right circumstances could Liberty Mutual quickly recycle its €102 million stake back to the mother ship and end up as the majority owner in Ireland’s largest direct insurer - picking it up for a song?  Dunno, what do you think?.

See that’s why it’s a wee premature to take down the sign at Arrivals in Dublin Airport just yet, you know the one: Bondholders and Carpetbaggers, welcome to the best little country in the world. Cheap State assets for sale. All suits welcome. Go to Taxi rank. Ask for Dept. of Finance.

- Eddie Hobbs