Friends First has written to the troubled Dublin finance firm, International Securities Trading Corporation (ISTC), seeking clarification on the security of 125 retail investors who put €43 million into two ISTC bonds sold by it.

Eamonn Twomey, head of marketing at Friends First, said the company had written to the firm set up by former Anglo Irish Bank executive Tiarnan O'Mahoney to see if investors in the bonds were safe after ISTC wrote off at least €70 million in the value of its assets last week.

Some 37 investors put up €15 million into the first bond, the Creative Bond, in December 2006. A further 88 people invested €28 million in the second bond, the Creative Step Up Bond, in June.

The bonds carried a coupon (dividend payment) of roughly 5.5 per cent a year over seven years. Mr Twomey said the first bond had paid a coupon of 2.75 per cent to investors in June.

"We are waiting for information from ISTC," said Mr Twomey. "We are just in a holding pattern at the moment until ISTC gets some indication on their own funding."

He said Friends First sought a minimum investment of €50,000 for the bonds and that they were aimed at "sophisticated investors". He said the brochure clearly set out what was on offer and "the customers were able to make up their own minds on it".

In the brochure for the Creative Bond, Friends First "strongly recommended" that investors familiarise themselves with ISTC, its operations and its risk management procedures.

ISTC, which raises money on the capital markets and lends it at a higher rate to financial institutions, last week postponed its annual results, suspended trading of its shares on the grey market and scrapped a €150 million convertible bond.

On November 8th, ratings agency Moody's downgraded ISTC's investments in structured vehicle investments (SIVs), forcing the firm to write down at least €70 million of €210 million in SIV-based investments.

Last Friday, another ratings agency DBRS cut its grading on ISTC's debt, saying it was in danger of defaulting. ISTC is due to make an interest payment on $235 million (€160 million) worth of preference share-like instruments placed with Asian investors earlier this year.

Mr O'Mahoney has been meeting ISTC's 25 banks over the past week in an effort to devise a rescue plan for the company.