Bank of Ireland gets tenders for C$39.82 million fixed/floating subordinated notes due 2015

By Jennifer Chiou

New York, Aug. 9 - The Bank of Ireland announced the results of the exchange offer and consent solicitation for its C$138,721,000 of lower tier 2 fixed/floating dated subordinated notes due September 2015.

As announced, holders were given two options: Those who chose option one will receive euro-denominated allotment instruments issued by the bank plus accrued interest, and those who chose option two will receive a cash payment for their securities, and no payment will be made for accrued interest.

As of Aug. 8, the expiration deadline, holders had tendered C$38.74 million of these notes for option one and C$1,075,000 for option two.

At the early participation deadline in July, holders had tendered C$33,285,000 of the notes for option one and C$165,000 for option two.

Bondholders who chose the equity option will receive an amount of allotment instruments equal to 40% of par. The amount will be 32% of par for securities tendered after the early participation deadline.

The allotment instruments will automatically convert into ordinary shares on the conversion date, which is expected to be Aug. 12. The conversion price is €0.1156 per share. The minimum denomination of the allotment instruments is €50,000.

Those who chose option two will receive a cash purchase price of 20% of par. The price will be 16% of par for securities tendered after the early participation deadline.

Holders will vote on an extraordinary resolution at a meeting on Aug. 10.

By tendering in the exchange offers, holders agreed to vote in favor of the proposals, which would modify the terms of the securities to include an option for the issuer to redeem or purchase all, but not only some, of the securities that remain outstanding following the exchange offers at 0.001% of par.

No consent fee will be paid.

The above offer was made in conjunction with tender offers for numerous tier 1 securities, for which the bank expected to issue €654,174,605 principal amount of allotment instruments and pay €10,120,980, $2,474,200, £814,340 and C$400 in cash.

Bank to generate €4.2 billion

As previously reported, the purpose of the exchange offers and consent solicitations was to generate capital. The bank is required to raise €4.2 billion of core tier 1 capital in order to satisfy the regulatory capital requirements announced by the Central Bank of Ireland on March 31.

Other elements of the bank's capital-raising efforts included a rights issue for €1.76 billion to €2.22 billion. The exact size was to be €4.35 billion minus the core tier 1 capital generated from the actions taken in regard to the subordinated debt securities.

The bank was also to place a €1 billion contingent capital instrument with the government.

The dealer managers for the exchange offers were Credit Suisse Securities (Europe) Ltd. (44 20 7883 8763), Deutsche Bank AG, London Branch (44 20 7545 8011) and UBS Ltd. (44 20 7567 0525, 203 719-4210 or 888 719-4210).

The EC/CS exchange agent, DTC exchange agent and tabulation agent was Lucid Issuer Services Ltd. (44 20 7704 0880), and the CDS exchange agent was Equity Financial Trust Co. (416 361-0152).

Bank of Ireland is a Dublin-based retail and commercial bank.

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