Bank of Ireland has announced the results of a revised offer made to a group subordinated, or junior, bondholders who did not take part in an earlier offer aimed at boosting the bank's capital strength.
The bank said bondholders representing £29m of the €75m of bonds originally sold by the Bristol & West building society, which Bank of Ireland later bought in 1991, had taken up the offer.
The bank initially asked these bondholders to swap their bonds for cash or shares, but scrapped the offer after just 12% of holders had replied due to difficulties arising from holding the security in certificated form.
Bank of Ireland said it became apparent that many of these bondholders - including many small investors - were experiencing 'unique difficulties' in participating in the original offer. Some investors also threatened to challenge BoI's move in the UK courts.
Under the new offer, holders of the bonds were offered £40.20 in cash for every £100 they hold. The bank originally offered cash at 20% of face value or equity at 40% of face value to junior bondholders.
The original offer was aimed at boosting the bank's capital position and reducing the amount of funding the State would need to inject. Holders of the Bristol & West bonds represent only 3% of bondholders on which the bank has imposed losses.
