BoI to issue €500m senior unsecured bond today

Bank of Ireland will issue a €500m senior unsecured bond as early as today as it continues a move back to normal market funding.

BoI to issue €500m senior unsecured bond today

The part State-owned bank has mandated Citi, Deutsche Bank, Morgan Stanley, Nomura and RBS for a euro-denominated five-year senior unsecured transaction expected to be rated Ba3/BB+ by Moody’s/S&P.

Bank of Ireland has made a series of issues over the past 12 months for the first time since 2009. Last november it raised €1bn through a covered bond, which was 3.6 times oversubscribed. At the beginning it raised €1.8bn through a hybrid equity/debt deal in order to refinance €1.8bn of Government-owned preference shares.

Bank of Ireland was not forced to raise any further capital following the results of the Central Bank’s balance sheet assessment, which was released at the end of last November. However, it was forced to raise loss provisions by €1.3bn.

It also emerged yesterday that the National Pension Reserve Fund had sold 44m shares in Bank of Ireland from its discretionary fund, which raised just over €8m. The sale reduces the Government’s stake in the bank from 14.05% to 13.95%.

The fund inherited the Bank of Ireland shares in 2010 when it took over the running of pension funds of the country’s universities. NTMA chief executive John Corrigan said it had not been possible to sell the shares before now because of a possible conflict of interest.

The fund holds the Government’s interest in Bank of Ireland on behalf of the State.

Bank of Ireland is the most profitable of the three domestic banks. Moreover, the Government is on course to make up to a €2bn profit on the €4.8bn rescue of the bank.

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