Business Irish

Thursday 23 November 2017

BoI to hold off on €1bn debt issue for weeks

Laura Noonan

Laura Noonan

A MOOTED billion euro bond issue from Bank of Ireland (BoI) is likely to be put on ice for several weeks, the Irish Independent has learned.

The market had been expecting BoI to launch the bond sale on Monday, but the plan was aborted amid a spike in interest rates for Irish government debt.

Sources close to the bank confirmed that other recent market developments made an imminent issue unlikely. This includes the prospect of further clarity over the final cost of Anglo Irish Bank's bailout as early as October.

BoI believes this clarity may improve market sentiment towards Irish bank debt and ultimately reduce the interest BoI will have to pay.


This week's extension of elements of the bank guarantee scheme may also improve sentiment, sources said.

BoI is also busy on its latest liability management exercise, attempting to swap C$400m (€300m) worth of existing Canadian bonds for new ones.

The bank is offering bondholders who switch a higher interest rate in exchange for an extended maturity date.

The effect will be to improve the bank's capital position, since bonds can be carried at a higher value when they're further from maturity.

An announcement on the success of the offer is expected on Thursday. BoI has already carried out several liabilities management exercises this year.

Irish Independent

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