Manufacturing & Supply Chain

Allied Irish Banks, p.l.c. (AIB) today successfully agreed to issue €500 million fixed rate resettable T1
perpetual contingent temporary write-down securities. The coupon for the initial fixed rate period until December 2020 has been fixed at 7.375%.

The transaction was arranged by Morgan Stanley, Deutsche Bank, Bank of America Merrill Lynch, HSBC, Davy and Goodbody Stockbrokers and attracted circa €4.75bn of total demand from a diverse range of international investors.

Final pricing was at a yield of 7.375% and the final order book at this pricing level was more than nine times over-subscribed. This again is a very strong endorsement of AIB’s progress in recent years.
The completion of this transaction and last week’s equally successful Tier 2 transaction puts AIB in a
position to return €1.7 billion of capital to the State by the end of 2015.

The AT1 and Tier 2 capital raising transactions are key actions in the simplification of the bank’s capital structure. Other capital measures, which include the partial conversion and redemption of the remainder of the 2009 Preference shares, are expected to complete prior to year end, subject to shareholder approval at an Extraordinary General Meeting on the 16th of December 2015.

Commenting on the transaction, Bernard Byrne, Chief Executive Officer said: “The outstanding success of our two recent capital raising transactions is very encouraging. The results demonstrate market confidence in AIB as an issuer. The significant participation by overseas investors, in both transactions, is an endorsement and acknowledgement of the progress that the Bank has made in recent years in restructuring and repositioning itself as a sustainable, profitable and investable business. These issuances are key stepping stones in ensuring the completion of the simplification of our capital structure by the end of 2015. This will enable the repayment of capital to the State and positions us well for a return to private ownership.”