Government move on AIB notes unlikely

The Government is unlikely to offload its €1.6bn contingent convertible (CoCo) capital notes in AIB before the results of the ECB’s comprehensive assessment of the banking system is completed later this year, according to market sources.

It is also likely that the Government will convert its preference shares in AIB into ordinary shares.

There has been a ramp-up in demand among investors for high yielding assets, which has prompted speculation the Government might look to offload its CoCo notes in AIB, which carry a yield of 10% and mature in 2016.