Bank of Ireland takes second go at debt sale
Bank of Ireland is making a second attempt at selling € 300 million of junior debt, having pulled the offering last month.
The bank had originally tried to sell the bonds at the beginning of last month, but pulled the sale at the eleventh hour because of its disappointment at the level of demand with investors rattled over Brexit tensions.
The State's biggest domestic lender by assets is offering the 10- year debt about 0.3 percentage points more than in the sale last month.
It comes after rival AIB last week secured more than € 3.6 billion of orders from investors for junior bonds that face losses in the event of the bank running into financial trouble. The level of demand was for more than seven times the € 500 million of so- called additional Tier 1 ( AT1) notes that AIB was selling.
The deal length for Bank of Ireland's offering and the deal size remains unchanged, according to a person familiar with the matter, who isn't authorized to speak publicly and asked not to be identified.
"They've been a little bit the victim of Brexit," said Vicki Cockbain, investment director at Aberdeen Standard Investments. "Bank of Ireland usually manages to get quite attractive pricing."
Irish bank shares have also gained since last month's postponed deal, paring this year's declines, on optimism the UK will avoid a no- deal departure from the European Union, thereby lessening risks to Ireland's economy.
Investors placed € 340 million of orders in Bank of Ireland's postponed sale. The bank said at the time that it delayed the deal to "ensure successful execution for both the issuer and investors."
The so- called Tier 2 subordinated notes that the bank is seeking to sell will form part of its capital base, ranking below the company's senior notes but ahead of its equity reserves.
The lender hasn't been alone in cancelling debt sales due to challenging market conditions. Toward the end of September, UK- based Metro Bank had to pull a £ 200m bond sale having received poorer interest than anticipated.