Monday 25 September 2017

BoI set for €1.8bn rights issue

Bank of Ireland chief executive Richie Boucher
Bank of Ireland chief executive Richie Boucher
Nick Webb

Nick Webb

Bank of Ireland is likely to raise €1.8bn in a rights issue to buy back the State's preference shares in the bailed-out bank.

Last week, Bank of Ireland boss Richie Boucher said he would tell investors shortly how he planned to refinance the State-owned preferred shares that mature in March of next year.

"They're most likely to launch a rights issue before the year is out, as there are risks to waiting until next year and the market conditions may not be as favourable," according to Investec analyst Emmet Gaffney.

The bank may sell other securities, such as subordinated debt, as well as the shares to help plug the shortfall.

A Bank of Ireland rights issue would be the largest rights issue on the Irish market since the bank's €1.5bn rights issue in 2010. This saw investors badly burned as shares crashed as the State stepped in to bail out the bank.

The clock is ticking for Boucher to get a mega rights issue away as Bank of Ireland will face a €455m "step up fee" to the State if it hasn't redeemed the special high-interest preference shares by next March.

Sunday Independent

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