Allied Irish Banks reveals tender results for 15 series of securities

By Angela McDaniels

Tacoma, Wash., June 16 - Allied Irish Banks plc announced the result of its tender offers for 15 series of notes, reserve capital instruments and preferred securities.

The bank offered 25% of par for its:

• £145,000 of outstanding subordinated callable fixed/floating-rate notes due 2030. Holders tendered all of the notes;

• $39,316,000 of outstanding dated callable step-up subordinated notes due 2015. Holders tendered $38,359,000;

• £1,261,000 of outstanding subordinated callable fixed/floating-rate notes due 2025. Holders tendered £125,000;

• €75,215,000 of outstanding callable subordinated step-up floating-rate notes due 2017. Holders tendered €49.93 million;

• £215,963,000 of outstanding 12½% subordinated notes due June 2019. Holders tendered £41,103,000; and

• €628,448,000 of outstanding 12½% subordinated notes due June 2019. Holders tendered €588,498,000.

The bank offered 22.5% of par for its:

• $108,104,999 of outstanding 10¾% subordinated notes due 2017. Holders tendered $93.51 million; and

• £385,344,000 of outstanding 11½% subordinated notes due 2022. Holders tendered £384,294,000.

The bank offered 10% of par for the following:

• Its €53,793,000 of outstanding perpetual subordinated callable step-up notes. Holders tendered €53,515,000;

• Its £58,608,000 of outstanding perpetual callable step-up subordinated notes. Holders tendered £58,558,000;

• Its $100 million of outstanding subordinated primary capital perpetual floating-rate notes. Holders tendered $98.98 million;

• Its €240,435,000 of outstanding 7½% step-up callable perpetual reserve capital instruments. Holders tendered €229,509,000;

• AIB UK I LP's €191,398,000 of outstanding fixed-rate/floating-rate guaranteed non-voting non-cumulative perpetual preferred securities. Holders tendered €187.39 million;

• AIB UK 2 LP's €95,041,000 of outstanding fixed-rate/floating-rate guaranteed non-voting non-cumulative perpetual preferreds. Holders tendered €94,624,000; and

• AIB UK 3 LP's £36,728,000 of outstanding fixed-rate/floating-rate guaranteed non-voting non-cumulative perpetual preferreds. Holders tendered all of these preferreds.

No amount will be paid for any accrued interest or arrears of interest on the securities.

The offers expired at midnight ET on June 13. The settlement date will be June 17.

Consent solicitations

Concurrent consent solicitations were held for the securities. AIB G.P. No. 1 Ltd. solicited consents to amend the terms of the three series of perpetual preferreds, and Allied Irish Banks solicited consents for the remaining securities.

Holders were asked to vote in favor of an extraordinary resolution that will give the issuers the option to redeem or purchase all, but not a portion of, any securities that remain outstanding after the tender offers at a price equal to €0.01 per €1,000, £0.01 per £1,000 or $0.01 per $1,000.

The extraordinary resolution would also amend the terms of the three series of preferreds to remove any restriction on any repurchase or redemption by the bank of junior or parity securities in the event that the bank elects not to pay any scheduled distributions on the relevant preferreds (each a "dividend stopper").

Holders who tendered were deemed to have consented to the extraordinary resolution.

The meeting date was June 16. The meeting for the €75,215,000 of callable step-up floaters due 2017 was adjourned for want of a quorum, and the resolution did not pass at the meeting for the holders of the £1,261,000 of subordinated callable fixed/floating-rate notes due 2025. The resolution passed at the remaining meetings.

No offer was conditioned on a minimum principal amount of securities being tendered or the completion of any other offer.

Additional offers

The company is also holding tender offers and consent solicitations for its €48,534,000 of outstanding subordinated callable step-up floating-rate notes due 2015, £35,357,000 of outstanding callable dated subordinated fixed-to-floating-rate notes due July 2023 and €217.92 million of outstanding 10¾% subordinated notes due 2017.

The offers for these notes will expire at 5 p.m. ET on July 20, and the meeting date for the consent solicitations will be July 22.

The company is offering 25% of par for the notes due 2015 and 2023 and 22.5% of par for the notes due 2017. The settlement date will be July 25.

Amendments made

On June 9, the bank announced the effectiveness of amendments to 16 of the series covered by the offer. The two series of 12½% notes were not amended.

The amendments were ordered by the Irish High Court on April 14 and are retroactive to April 22. The action is part of the Central Bank of Ireland's Prudential Capital Assessment Review, under which several Irish banks have been ordered to deleverage and increase capital. Allied Irish Banks must generate €13.3 billion of capital.

As previously reported, nine series were amended to make interest payments optional and to extend the maturity dates.

Four series were amended to remove the restrictions on the payment of any distribution or dividend on, or any repurchase or redemption of, any other specified junior or parity securities.

Three series were amended to remove the requirement that the bank must pay any arrears interest on them upon the payment of any dividends. This is now optional

As a result of the amendments, the bank did not pay the interest due on June 6 on its £700 million of callable dated subordinated fixed-to-floating-rate notes due July 2023.

The dealer manager for all of the tender offers is J.P. Morgan Securities Ltd. (contact Ryan O'Grady at 44 0 20 7779 2468 or ryan.ogrady@jpmorgan.com, or contact Sebastien Bamsey at 44 0 20 7777 1333 or sebastien.m.bamsey@jpmorgan.com). The tender and tabulation agent is Lucid Issuer Services Ltd. (contact Yves Theis or David Shilson at 44 20 7704 0880 or aib@lucid-is.com).

Allied Irish Banks is a Dublin-based financial services company.

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