February 8th, 2011 05:27 AM

'It may turn out to be the most important bank you've never heard of.

Amagerbanken was taken over by the Danish government today.* As with the Irish banks, Amagerbanken suffered huge losses on loans to property developers and investors in commercial real estate.* But the rescue comes under new regulations which stipulate steep losses for bondholders.* According to Bloomberg, senior bondholders and depositors over the insured limit will face losses of approximately 41%.

Some bondholders, however, still fall under a government guarantee, but expect Amagerbanken to be held up as an example by those who favor haircuts for bondholders rather than bailouts.* In particular, we can expect Ireland's Fine Gael party (pronounced feena gail) to point to Denmark when they make their own case for unilaterally restructuring Ireland's bank debt.* And when they do, the cat will be out of the bag.'

Read more: AMAGERBANKEN - $2.8 Billion Bank Failure In Denmark: Senior Bondholders Whacked 41%