AIB has started taking orders on a €500m three-year bond today, building on a resurgence in Irish capital markets.
Hoping to emulate the debt market success of Bank of Ireland earlier this month, AIB started marketing the paper according to reports from Reuters.
Bank of Ireland's three-year covered bond, which reopened the country's bank debt market in mid November, was used as a reference for pricing.
Its €1 billion three-year deal was another watershed moment for financial institutions from the euro zone's periphery, who are keen to wean themselves off ECB liquidity at affordable rates.
According to a banker involved in the deal, AIB was opting to sell a smaller offering than Bank of Ireland.
"We're now going to come flat to where Bank of Ireland priced which is a great result," he said. "AIB is a more challenging name and so it makes sense not to match Bank of Ireland," he added.
Irish banks and corporations have been cementing their path to rehabilitation over the past month which has resulted in a number of transactions. The ESB raised €500m worth of seven-year debt that attracted around €6 billion of demand in mid November and was followed up by Bord Gais Eireann that sold five-year debt that was 13 times subscribed.
