PTSB raises €525m from capital markets

Permanent TSB has raised €525 million from capital markets through the sale of €400 million worth of shares and €125 million via a debt instrument.

PTSB today raised €400 million through the sale of 88.9 million ordinary shares with private investors. This priced the stock at €4.50 per share, which was the top of the price range indicated by the bank last week.

It has also raised €125 million through the issuance of AT1 capital with a coupon of 8.625 per cent.

In addition, the Government is selling 21.8 million shares in the group for €98 million. All of this will have the effect of reducing the State’s holding in PTSB to 75 per cent from the 99.2 per cent currently.

The bank will now seek admission to the main stock markets in both Dublin and London in the next two days.

The funds will be used in part to plug a €125 million hole in its capital, which was identified in regulatory stress tests last October. In addition, the bank will pay €410.5 million to the Government through the repurchase of the State’s contingent capital notes.

PTSB chief executive Jeremy Masding described the investor interest as "exceptional" with the company making more than 100 presentations to potential investors over the past six months.

The bank also plans an open offer to existing retail shareholders, who own the residual shares in the bank. This will be on the same terms as offered to the new investors today. The open offer will close in three weeks.

The Minister for Finance Michael Noonan, welcomed the capital raising by PTSB and its return of some of its €2.7 billion bailout to the State following its recapitalisation in 2011.

He said it was an “important milestone” for the company and he expressed his satisfaction at the State retaining a “valuable” 75 per cent holding in PTSB.

"The move to the main markets on both the Irish Stock Exchange and the London Stock Exchange is a positive for the bank and allows the State additional flexibility and liquidity to manage its sell down of PTSB in the future," Mr Noonan said.