(Adds lead manager comment, background)
By Alice Gledhill
LONDON, June 8 (IFR) - Bank of Ireland is preparing to hit the road for an inaugural euro Additional Tier 1 bond, according to a lead manager, the first benchmark in that format from the country.
The issuer will meet investors in the UK and across Europe on Tuesday June 9 and Wednesday June 10.
“I think a lot of people have been waiting to see this come so we’ve already been inundated with calls to meet them,” a lead banker said.
“It definitely feels like there is good momentum behind the name, and the rarity value in terms of the region and that asset class should help.”
Permanent TSB is the only other Irish bank to have issued Additional Tier 1 capital previously. It placed EUR125m with a small group of investors in April, offering a juicy coupon of 8.625%.
That transaction was yielding 8.22% on Monday, according to Tradeweb prices.
Following a rush of issuance in the first quarter of the year, the Additional Tier 1 market has been much quieter as volatility deterred issuers. However, a barnstorming sterling trade from Santander UK last week has revived confidence in the sector. That £750m issue attracted over £5bn of demand.
Bank of Ireland has mandated Deutsche Bank and UBS as joint structuring advisers and joint bookrunners as well as Bank of America Merrill Lynch, Credit Suisse, Davy and Morgan Stanley as joint bookrunners for the issue.
The perpetual bond will be temporarily written down if the bank’s Common Equity Tier 1 ratio falls below 5.125%. Bank of Ireland’s fully-loaded CET1 ratio was 9.3% at the end of 2014 while its transitional CET1 was 14.8%. (Reporting by Alice Gledhill, Editing by Helene Durand, Julian Baker)