BoI in new debt buyback offer

 

Bank of Ireland has announced plans to buy back £75 million of junior debt at a discount of about 60 per cent.

The bank scrapped a previous offer to swap perpetual unsecured bonds for cash or equity at the end of June after some owners of the securities had "procedural difficulties."

The lender withdrew that offer as it faced a court challenge from an investor contesting the exchange of the securities, originally sold by the Bristol and West Building Society in 1991. They became obligations of BoI when it bought the former mutual lender for £600 million in 1997.

The original offer applied an 80 per cent discount on bonds exchanged for cash, and 60 percent for those swapped for equity.

The Bank is inviting bondholders to tender their bonds for purchase by the bank for a total cash consideration of £40.20 per £100 in nominal amount of bonds purchased, consisting of a purchase price of £35 plus accrued and unpaid interest of £5.20.

The offer commences today and will expire on September 22nd.

The bank stressed that the offer was voluntary and that bondholders were under no obligation to participate.

Bloomberg