Wednesday 21 March 2018

PTSB raises €400m in deal secured against its UK portfolio

Donal O'Donovan

Donal O'Donovan

State-owned Permanent TSB (PTSB) borrowed €400m this week, raising the cash in a deal secured against a share of its stock of UK mortgages.

Permanent TSB is the last of the bailed-out banks that is still not borrowing on the bond markets, but the recent deal shows it can raise cash from private deals where UK mortgage assets are pledged as security.

The latest deal brings to €1bn the amount of new debt raised by the bank so far this year.

The bank has raised €3.6bn this year when refinancing of some debt is included.

Financial details, including the cost of the new borrowing have not been revealed, but the banks says the debt is being raised at market rates.

Last week ratings agency Moody's downgraded PTSB, citing "uncertainty and risks", to B3 from B1.


PTSB became the last and smallest of the Irish-owned bank to survive the banking crisis after the EU and IMF approved the Government's decision not to shut it down last year.

Earlier this year the bank announced its intention to dramatically increase lending including for home loans in 2013 for the first time since the property crash.

Meanwhile, the UK-based Lloyds Banking Group said it set aside £1.2bn (€1.4bn) to cover loan losses in Ireland last year, just a third of the amount set aside in 2011.

The loans are mainly a legacy of Lloyds' takeover of Bank of Scotland (Ireland), which no longer does business here but was a major lender during the property bubble.

Lloyds said the pace of new impairments on Irish loans has slowed to 1.6pc in 2012 from 4.1pc a year earlier.

The bank has a reputation for dealing with its Irish losses.

Last year it sold €1.8bn of Irish property loans for just €149m to US investor Apollo Global Management.

Irish Independent

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