Wednesday 23 January 2019

AIB €500m bond hopes 'crumbled' in tough market

AIB received tepid interest in launching a €500m bond issuance (stock picture)
AIB received tepid interest in launching a €500m bond issuance (stock picture)
Gavin McLoughlin

Gavin McLoughlin

AIB received tepid interest in launching a €500m bond issuance.

The bank managed to get the €500m it was looking for but market observers said the deal was disappointing, with the bank not seeing an order level substantially beyond the €500m range. The bank will pay a coupon, or interest, of 2.25pc on the seven-year debt.

One banker who spoke to Reuters' specialist publication International Financing Review said: "it looked like the market had a reasonable start, but then it crumbled". The banker said he "felt for" the Irish bank.

Markets are becoming more difficult amid ongoing trade tensions. AIB shares were worth €5.80 at one point in late January but have gone back to €4.57 - 17c above their IPO price when the Government floated a stake last year.

Elsewhere, the Bank of England hit back at EU criticism yesterday, saying British banks were fully prepared for any disorderly Brexit and that it was the EU itself which should act to prevent market disruption. Bank of England Governor Mark Carney challenged assertions made by the EU's banking watchdog, the European Banking Authority (EBA), on Monday when it said that banks were inadequately prepared for a hard Brexit.

"With respect, the EBA's comments earlier this week were incomplete," Mr Carney said.

"They did not acknowledge the temporary permissions regime... which has been very clearly signalled by the UK government," he added.

This regime would allow branches of EU banks in London to continue operating after next March, when Britain leaves the EU, but the EU has yet to reciprocate for UK lenders operating in the bloc

(Additional reporting Reuters)

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