FIONA REDDAN

Bank of Ireland is set to raise as much as €750 million as it looks to optimise its capital structure by raising money in a euro-denominated lower Tier 2 issue.

Yesterday the bank mandated five investment banks (Davy, BNP, Deutsche Bank, Morgan Stanley and UBS) for a deal that is likely to be rated B by S&P with a term of ten years.

Ciaran Callaghan, senior credit analyst with Merrion Stockbrokers, said he expects to see "strong demand" for the issue, adding that "the deal will represent another vote of confidence by investors in the BoI franchise and help the bank to diversify its capital base."

He said that a Tier 2 issuance from the group is expected as it seeks to build up and strengthen its overall capital profile, especially as total solvency ratios are now becoming more important due to depositor preference and the prospect of senior unsecured bail-ins.