Allied Irish to raise further 500 mln euros via bond-IFR

DUBLIN Tue Jan 22, 2013 11:10am GMT

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DUBLIN Jan 22 (Reuters) - Allied Irish Banks was poised to raise 500 million euros ($665 million) via a three-and-a-half-year bond on Tuesday, the state owned lender's second issue in a matter of weeks as it gradually returns to regular market funding.

Ireland's main banks have followed the sovereign back into capital markets in recent months, over two years after they lost access, forcing the state into a bailout and lenders to turn to the European Central Bank (ECB) for funding.

AIB raised 500 million euros through a three-year sale in November, the first time the bank issued a bond backed by Irish mortgages and without the assistance of a state guarantee since 2007

While that issue was sold at mid-swaps plus 270 basis points, Tuesday's slightly longer-dated paper was priced at mid-swaps plus 185 basis and attracted more than 2 billion euros worth of orders, IFR, a Thomson Reuters unit, reported.

AIB - which set the state back over 20 billion euros during the financial downturn, the most handed out to any lender still open - said last year that it hoped to tap covered bond markets two or three times this year.

Domestic-owned banks in Ireland saw their reliance on ECB funding fall by 6.5 billion euros to 48.7 billion in December, almost half the level it stood at two years ago, Ireland's finance department said last week.

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