AIB eyes bond sale to help repay €21bn

Allied Irish Banks plans to return to the subordinated bond market for the first time since the financial crisis. It is preparing to start repaying its €21bn bailout by the year’s end.

AIB is seeking to redeem €1.5bn to €2bn of the State’s holdings of €3.5bn of preferred stock in the bank, with the remainder converting to equity.

To help fund the deal and maintain capital levels, the lender may sell tier-2 bonds and additional tier-1 notes, the sources said, declining to give the amounts involved.