Advertisement

We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

Eamonn Farrell/Photocall Ireland

AIB raises €500 million in auction of three-year bond

The almost entirely State-owned bank raises €500 million by selling a bond which is not guaranteed by the government.

A SUBSIDIARY of Allied Irish Banks has raised €500 million through a bond auction – only its second of the year.

AIB Mortgage Bank auctioned three-year bonds under its Mortgage Covered Securities programme.

The auction of the asset-covered securities – which are secured based on mortgage loans and are not guaranteed by the Irish government – was the first since 2007, and only the second held by AIB this year after issuing a £395 million bond in May.

The bank said the bonds carried an interest rate of 2.7 per cent, and that the bank had received over four times more offers from investors than it had taken up. Over 95 per cent of investor demand came from outside Ireland, it added.

“The final sizing of the transaction, notwithstanding the level of demand, is consistent with AIB’s stated strategy to engage with the market in a balanced and measured manner with a series of well placed, well timed, appropriately structured and priced transactions,” a statement from AIB said.

This would “ensure viable funding levels while building confidence with external investors,” it added.

The bank is 99.8 per cent owned by the taxpayer, and has been reliant on capitalisation from the State and emergency cash from the European Central Bank in recent years.

Two weeks ago Bank of Ireland became the first Irish bank to borrow without State support, when it raised €1 billion in a similar auction.

Read: AIB says ‘substantial progress’ made on restructuring

Readers like you are keeping these stories free for everyone...
A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

Close
25 Comments
    Install the app to use these features.
    Mute dublinlad72
    Favourite dublinlad72
    Report
    Nov 28th 2012, 3:26 PM

    So it’s not guaranteed by the Government? That means if AIB defaults then the bond holders loose their money. Seems fool proof. Plus I can’t see any Government guaranteeing Un-guaranteed bond holders. That would be a mistake for sure, if it happened.

    Anonymous user
    29/09/2008.

    ……

    75
    Install the app to use these features.
    Mute Eileen Gabbett
    Favourite Eileen Gabbett
    Report
    Nov 28th 2012, 3:30 PM

    Absolutely , All good so . That would be a win win situation …or would it ?

    8
    Install the app to use these features.
    Mute My Two Cents
    Favourite My Two Cents
    Report
    Nov 28th 2012, 7:46 PM

    Reading all this above and below looks like the business model for Ireland Inc. does not work…we are well and truly broken for many years to come…Im single and have a job but when im losing half my salary on pay day…its just not worth it anymore…might rent out the house and go to the UK. The Tipping point is getting closer for all of Irish society..

    6
    Install the app to use these features.
    Mute gerry
    Favourite gerry
    Report
    Nov 28th 2012, 3:29 PM

    But we will still pay it even if the world gets worse

    12
    Install the app to use these features.
    Mute Ireland for Change
    Favourite Ireland for Change
    Report
    Nov 28th 2012, 5:00 PM

    Printing worthless pieces and exchanging them for more worthless pieces of paper at 2.7% roll on fractional reserved banking and the creation of more worthless pieces of paper

    7
    Install the app to use these features.
    Mute Gareth Walker-Ayers
    Favourite Gareth Walker-Ayers
    Report
    Nov 28th 2012, 4:21 PM

    “€500m million” So it’s €500,000,000,000,000? Good solid proofreading there!

    6
    Install the app to use these features.
    Mute Eileen Gabbett
    Favourite Eileen Gabbett
    Report
    Nov 28th 2012, 3:29 PM

    It sold 500,000,000 today , but borrowed 1,000,000,000 a few weeks ago …. To what end ?

    5
    Install the app to use these features.
    Mute _doesnotcompute
    Favourite _doesnotcompute
    Report
    Nov 28th 2012, 3:41 PM

    To help close the gap between what they are borrowing and what they are taking in, bringing them closer to being on a more stable footing. You’d think people who always complain about bankers would be happy about this, but then again some people are never happy.

    58
    Install the app to use these features.
    Mute Eileen Gabbett
    Favourite Eileen Gabbett
    Report
    Nov 28th 2012, 3:45 PM

    doesnotcompute
    Thank you :) ! Why borrow in the first place …. And yes , like I said above , its a win win situation ,as it is non government guaranteed . Oh wait ! We shall have to wait and see .

    5
    See 9 more replies ▾
    Install the app to use these features.
    Mute Belly Up
    Favourite Belly Up
    Report
    Nov 28th 2012, 3:46 PM

    Absolutely doesnotcompute. These people are idiots.

    19
    Install the app to use these features.
    Mute Eileen Gabbett
    Favourite Eileen Gabbett
    Report
    Nov 28th 2012, 3:48 PM

    Belly up
    Too right and yet they are being paid such vast amounts of money in salaries and bonuses and no one knows yet if the bank will return to profit ….; IDIOTS :)

    8
    Install the app to use these features.
    Mute Cinementor
    Favourite Cinementor
    Report
    Nov 28th 2012, 3:49 PM

    People always complain about bankers who are immune to accountability.
    You know when most of make mistakes in our jobs there is a very real chance we loose them depending on the severity of the error.
    Or when the companies we work for loose money, we suffer pay cuts or redundancies, if we partake in “White collar crime” we face the courts etc etc.

    See the difference?

    5
    Install the app to use these features.
    Mute alan
    Favourite alan
    Report
    Nov 28th 2012, 3:54 PM

    As McWilliams said they are only borrowing for the thousands of redundancies coming

    14
    Install the app to use these features.
    Mute Andrew Telford
    Favourite Andrew Telford
    Report
    Nov 28th 2012, 4:41 PM

    The investment class must be smarter than you if they still have money to invest… No?

    10
    Install the app to use these features.
    Mute Eileen Gabbett
    Favourite Eileen Gabbett
    Report
    Nov 28th 2012, 5:40 PM

    Andrew Telford
    that’s roish…. No !

    4
    Install the app to use these features.
    Mute Conor
    Favourite Conor
    Report
    Nov 28th 2012, 5:56 PM

    P.S bank of Ireland borrowed the billion! Quick for a rant?

    1
    Install the app to use these features.
    Mute Andrew Telford
    Favourite Andrew Telford
    Report
    Nov 28th 2012, 5:57 PM

    O, beware, my lord, of jealousy;
    It is the green-eyed monster which doth mock; The meat it feeds on

    8
    Install the app to use these features.
    Mute Eileen Gabbett
    Favourite Eileen Gabbett
    Report
    Nov 28th 2012, 6:08 PM

    O Misery !

    2
Submit a report
Please help us understand how this comment violates our community guidelines.
Thank you for the feedback
Your feedback has been sent to our team for review.
JournalTv
News in 60 seconds