Fundraising programme to secure €2bn on mortgages

Bank of Ireland has said it intends to start an Asset Covered Securities (ACS) fundraising programme during the second half of 2004, subject to regulatory approvals.

The Bank plans to raise up to €10bn for the group through the programme, over a four to five year period, with the first tranche amounting to €2bn and will be secured on Irish mortgages.

This will be the first mortgage bond issued under the Asset Covered Securities Act 2001.

Mike Soden, group chief executive said: "The ACS programme enables us to use our significant mortgage asset ownership to raise medium term debt finance in a particularly cost effective manner.

"It also facilitates investor diversification, complementing our public issue programme".

Bank of Ireland plans to use both Irish and British mortgages to back this funding initiative.

Initially, the concentration will be on Irish mortgage assets but it is envisaged that the programme will ultimately contain bonds backed by Irish and British mortgages.

The Irish element of the programme is subject to approval from IFSRA in Ireland and the British element will be subject to approval from IFSRA and the FSA in the Britain.

Subject to satisfying the necessary criteria, the bank hopes that the ACS bonds will be recognised as AAA rated by credit rating agencies.