Bank of Ireland has offered to swap subordinated bonds at a premium to the market rate as it seeks to bolster its capital.
The bank will exchange as much as €1.5 billion of its lower Tier 2 bonds for new, 6.75 per cent Government guaranteed bonds in euros and pounds due 2012, according to a statement.
The tenders will be made at between 46 per cent and 57.5 per cent of face value, more than their current market price. Bank of Ireland, told by regulators to raise €2.2 billion, will make a gain on the exchange to boost capital.
Lenders in distress including Lloyds Banking Group have used the method to raise capital, while Anglo Irish Bank offered 20 cents on the euro for its subordinated debt.
Bloomberg