Thursday 19 April 2018

IL&P fears increase in mortgage arrears

Joe Brennan

Irish Life & Permanent (IL&P) highlighted in a bond document yesterday that its mortgage arrears could rise in this country as property prices continue to fall and unemployment continues to track higher.

"Property prices are continuing to decline in Ireland and expectations of higher unemployment rates may, if realised, lead to higher delinquency rates in the future," the group said in a prospectus for a €15bn bond programme.

The bancassurer did not give any updated figures in the document beyond the end of last June, as it is in a 'closed period' -- when it is barred from issuing market-moving news -- ahead of its full-year figures next week.

Meanwhile, Bank of Ireland (BoI) confirmed yesterday that it had placed a $1bn (€737m), two-year bond among 50 investors internationally. The offer, which yielded a 2.87pc annual coupon to the initial investors, attracted bids that amounted to $1.25bn.

It is covered by the new state banking guarantee scheme, which will cost BoI an estimated extra 1pc annually.


The final allocation of investors saw institutions in America take 39pc of the bonds, with Europeans making up a further 35pc. The remaining 26pc is in the hands of investors from Asia and the Middle East.

NCB Stockbrokers analyst Ciaran Callaghan said the pricing of the BoI deal, at 1.75 percentage points above the benchmark mid-swaps market rate, compared with an IL&P deal in January when it paid 1.65 percentage points over the mid-swaps rate.

"However, conditions in the debt markets have deteriorated since that point, with contagion from the Greek crisis impacting sentiment," he said.

Irish Independent

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