Friday 19 January 2018

Three-year bond issue nets €1.25bn for IL&P to bring total for year to €5bn

John Mulligan

Irish Life & Permanent has raised €1.25bn via a three-year bond issue in a move that brings the total raised under bond issuances so far this year by the group to €5bn.

The bancassurer said the latest bond had been significantly oversubscribed and attracted strong international interest from more than 80 investors. Most of them were big European financial institutions.

The funds were priced to yield 135 basis points over the so-called mid-swap rate, which is used for pricing debt, and the bond is protected under the extended state guarantee scheme.

The lead managers for the issue were Bank of America Merrill Lynch, BNP Paribas, Deutsche Bank and JP Morgan Chase.

A spokesman for IL&P said the strong interest in the bond demonstrated the "encouraging demand" for Irish debt and bonds from the institution.


Last week, state-owned Anglo Irish Bank secured €2.25bn from the sale of two bonds.

Irish financial institutions, particularly those that have received cash from the taxpayer, are raising debt via bond issues to refinance substantial amounts of existing debt. IL&P is the only major Irish-owned financial institution that has not sought a capital injection from the State and which has not offloaded any of its loan book to the National Asset Management Agency (NAMA).

Last month, IL&P said it made an operating loss of €196m in 2009, compared to an operating profit of €341m in 2008. Its provision for impaired loans last year soared to €376m from €82m in 2008.

IL&P's boss Kevin Murphy said in March that the group would need to raise up to €600m from shareholders before it could push its loss-making banking arm, Permanent TSB, into an industry merger. It is expected that Permanent TSB will merge with the entity emerges following a proposed tie-up between EBS and Irish Nationwide.

Irish Independent

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