Monday 20 November 2017

EBS to hit market with €1bn bond sale in wake of debt auction

Joe Brennan

EBS Building Society is poised to hit the market this morning with a €1bn bond sale -- making it the first Irish lender to dip its toes in the debt markets since Greece's budget crisis rattled investors.

Sources said that the building society plans to issue the State-guaranteed bond with a five-year maturity in a deal being led by brokers JP Morgan, Deutsche Bank, BNP Paribas and Credit Suisse.

EBS's confidence in generating investor interest has been buoyed by the successful Irish Government debt auction on Tuesday, which raised €1.5bn, having been 2.8 times oversubscribed.

The bond auction, which raised the maximum amount sought, means that Ireland has reached over 40pc of the €20bn it expects to raise in the debt markets to plug the country's Budget deficit.


Bank of Ireland, Allied Irish Banks and Irish Life & Permanent have raisedin excess of a combined €5bn since the beginning of the year under the State's new guarantee scheme, which covers bond issuances of up to five years.

The new scheme has been structured in a way that lenders can choose whether to issue State-backed or unguaranteed bonds. The cost of the new guarantee is more expensive across the board.

EBS is currently in talks to effectively take over the €2bn mortgage portfolio and €4bn-plus deposit book that Irish Nationwide will be left with after the National Asset Management Agency (NAMA) takes over its €8.3bn property and construction loans.

EBS, headed by chief executive Fergus Murphy, is expected to transfer €1bn of loans to the country's so-called 'bad bank'.

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