Bank of Ireland raises EUR 1.5 billion of 5 year funding in first partially un-guaranteed public transaction by an Irish bank since inception of the Government Guarantee

• Bank of Ireland launched a highly successful EUR 1.5 billion 5 year Euro fixed rate covered senior debt bond transaction
• This transaction was the first partially un-guaranteed public benchmark transaction by an Irish bank since the inception of the Government Guarantee. This issue is Government guaranteed until September 30, 2010 and un-guaranteed thereafter.
• The issue represents a first step in the re-opening of the un-guaranteed wholesale funding market for Bank of Ireland
• The covered bond was issued by Bank of Ireland Mortgage Bank under the Irish Asset Covered Securities Legislation.
• The trade is backed by a pool of 100% prime Irish residential mortgages
• Covered bond rated Aaa/AAA by Moody's and Standard & Poor's (expected)
• The issue price closed at mid swaps + 190 basis points amid strong investor demand
• Oversubscribed order book of EUR 3.8 billion
• Order book opened and closed within 90 minutes
• Issue sold to well-diversified range of over 150 investors across 24 countries

Today's highly-successful trade is a significant vote of confidence by international bond investors in Bank of Ireland, and the series of supportive measures enacted by the Irish State to support the Irish Banking System.

Bank of Ireland Group today (9th Sept 2009) announced that it has raised EUR 1.5 billion of 5 year funding through a highly-successful EUR fixed rate covered bond transaction. This trade is significant as it is the first partially un-guaranteed public benchmark transaction by any Irish bank since the inception of the Government Guarantee in September 2008. This transaction represents a first step in the re-opening of the un-guaranteed wholesale funding market for Bank of Ireland. The issue follows an extensive series of investor meetings with covered bond investors held by Bank of Ireland across the UK and Europe in recent weeks.

The transaction was issued by Bank of Ireland Mortgage Bank under the Irish Asset Covered Security Legislation. Investor demand for Bank of Ireland's transaction today was also underpinned by the high-quality Irish residential mortgage collateral pool which backs the Group's covered bond issuance. The covered bond is expected to carry the highest possible credit ratings; Aaa/AAA from Moody's and Standard & Poor's.

Today's covered bond transaction was oversubscribed with a final order book of EUR 3.8 billion within 90 minutes. There was a very strong international participation in the trade with 96% of orders from outside of Ireland. Over 150 investors from 24 countries participated in the transaction. The final allocation of investors included; 42% from Germany, 18% from Benelux, 8% from the Nordic region, 7% from the UK, 5% from Switzerland, 4% each from Ireland and Italy, and 3% each from France, Iberia, Eastern Europe and the Middle East & Asia.

The issue was also diversified across investor type with very strong demand from long term investors; with 51% issued to Asset Mangers, 15% issued to Banks, 13% issued to Insurance Companies, 11% issued to Central Banks/Official Institutions, 8% issued to Pension Funds with the remaining 2% bought by other institutional buyers.

Bank of Ireland will pay an annual coupon for this funding of 4.625%, which is equivalent to 190 bps over the 5 year EUR mid-swap rate.

Covered bonds are a key element of Bank of Ireland's long term funding strategy and allow the Group to both diversify funding sources and extend duration of wholesale funding. The transaction is Bank of Ireland's fourth public benchmark covered bond issue and the Group's first public covered bond issue since July 2006.

Today's transaction is highly significant as Bank of Ireland is the first Irish bank to issue a public transaction not covered by the Government Guarantee scheme since September 2008.

Ends

Contacts

Anne Mathews
Group Corporate Communications
Tel: 01 604 3836 / 087 246 0358

Geraldine Deighan
Head of Group Investor Relations
Tel: 01 604 3501

Darach O'Leary
Head of Term Funding
Tel: 01 799 3140