Bank of Ireland says it has terminated the exchange offer for holders of its 13.375% unsecured perpetual subordinated bonds worth £75m sterling. It said some owners of the securities had 'procedural difficulties' in taking part in the exchange.
The bank had asked the bondholders to accept the offer of cash at 20% of face value or equity at 40% of face value under its liability management exercise.
By the close of business on Friday, about 12% of these bondholders have accepted the bank's offer. It said this contrasts with an overall participation level of about 74% of other eligible bondholders.
In a statement today, the bank noted that bond holders outside the clearing systems may have found it 'difficult to participate efficiently' in the exchange offers. Bonds already tendered in the offers will be returned to the holders, it said.
It also said that it intends to instigate a new offer to holders. 'In so doing, the bank will seek to address the unique difficulties that have been highlighted to date with regard to participation in the terminated offers,' the statement said.
The bond, originally sold by the Bristol & West Building Society, which was taken over by Bank of Ireland in 1997, has a face value of £75m, representing just over 3% of the junior bondholders the bank is imposing losses on.
The bank raised nearly half of the €4.2 billion of additional core Tier 1 capital it is required to find by the end of July after 74% of the bondholders took part in an early offer of the debt swap.
