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Bank of Ireland raises EUR 1 billion of 3.5 year funding in its second public transaction beyond the maturity date of Government Guarantee

Key Highlights

  • Bank of Ireland launched a highly successful EUR 1 billion 3.5 year senior unsecured fixed rate transaction
  • This transaction is Bank of Ireland's second public benchmark issue this month (September) which matures beyond the maturity date of the Government Guarantee in September 2010
  • The transaction follows the Group's highly-successful 5 year covered bond issue earlier this month, which was the first step in the re-opening of the un-guaranteed wholesale funding market for Irish issuers
  • The transaction was announced with an initial price range of 250 to 260 basis points over mid swaps. Following strong investor demand, official price guidance was tightened to mid swaps + 250 basis points area, tightening further to a final price of 245 basis points over mid swaps.
  • 3.5 year maturity (April 2013) at a cost of mid swaps + 245 basis points allows Bank of Ireland the opportunity to lengthen and diversify the duration of term wholesale funding
  • Oversubscribed order book of EUR 2.5 billion
  • Order book opened and closed within 1 hour
  • Issue sold to well-diversified range of over 220 investors across 26 countries
  • Issue rated A1/A ratings by Moody's and Standard & Poor's (expected)

Bank of Ireland Group today (29th Sept 2009) announced that it has raised EUR 1 billion of 3.5 year funding through a senior unsecured fixed rate transaction. Today's highly successful trade is another important step towards the normalisation of funding conditions for Bank of Ireland. During the last month, the Group has proven ability to access diversified forms of long term funding, which are un-guaranteed beyond the maturity of the Government Guarantee.

The execution of today's trade was exceptionally smooth. Bank of Ireland began the process of assessing investor demand yesterday (Monday) and on the back of very strong interest, the Group opened order books at 10.30am today (Tuesday), closing them just one hour later with total orders in excess of EUR 2.5 billion. Bank of Ireland was able to transact today's issue in a very efficient manner and without undertaking additional debt investor meetings, due to the Group's on-going policy of regular communication with debt investor stakeholders.

Today's senior unsecured transaction was oversubscribed with a final order book of over EUR 2.5 billion within one hour. There was a very strong international participation in the trade with 92% of orders from outside of Ireland. The order book was of a very granular nature with over 220 investors from 26 countries participating in the transaction.

The final allocation of investors included; 31% from Germany/Austria, 14% from UK, 11% from France, 8% each from Ireland, Switzerland and Italy, 6% each from Benelux and Iberia, 5% from Nordic region, 2% from Asia and 1% from rest of world.

The issue was also diversified across investor type with very strong demand from long term investors; 61% was issued to Fund Mangers, 18% issued to Banks, 6% each issued to Retail/Private Banks and Pension Funds, 5% to Insurance companies and 4% to Central Banks.

Bank of Ireland will pay an annual coupon for this funding of 4.625%, which is equivalent to 245bps over the 3.5 year EUR mid-swap rate.

Today's trade is a further 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.

Ends 29th September 2009

Contact

Anne Mathews
Group Corporate Communications
Ph. 01 604 3836 / 087 246 0358