Bank of Ireland will raise €580m ($785m) on equity on 4 December to repay €1.8bn ($2.4bn) of its state-backed bailout package.

The bank was bailed out by the Irish government in 2009 and given the upcoming exit from the EU-IMF bailout plan of the country on 15 December, the move is very timely for state coffers.

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The bank declared: "Over the past four and a half years the bank has taken a number of significant steps to normalise its relationship with the state. This capital package is a very material part of the normalisation."

Minister for finance Michael Noonan stated: "The successful conclusion of this transaction will see the State recoup a premium on its €1.8bn investment thus generating a profit for the taxpayer."

The share issuance will redeem €537m ($729m) of the shares, while the remainder of the whole sum will be raised by issuing debt secured on the preference shares.

The sale will bring funds generated by the Irish State from the financial sector to a total of €4.1bn ($5.5bn), including the €1.3bn ($1.77bn) sale of Irish Life and the €1bn ($1.36bn) redemption by Bank of Ireland of contingent convertible capital notes.

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UBS, Deutsche Bank, Credit Suisse, Davy and UBS will act as placing agents for Bank of Ireland, while Bank of America Merrill Lynch will join the quartet as joint led managers and underwriters for the debt sale to private investors.

 

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