AIB said it raised €625m yesterday from the issuance of a new bond to institutional investors which offered an interest rate of 7.125%.
The bank said the Additional Tier 1 perpetual bond will further support it in meeting its regulatory capital requirements.
AIB said that initial demand from investors was strong and peaked at €3.2 billion. This allowed the bank to reduce the coupon on the bond down from the originally envisaged interest rate of 7.625%.
It noted that the investor book mainly consisted of high-quality asset managers, with UK investors accounting for about 40%. French investors accounted for about 20% and US offshore funds about 15% which it said provided a good breadth of investor interest.
Yesterday's funding raising comes after AIB Group issued a $1 billion ten-year senior bond in March - the longest duration for such a bond ever issued by an Irish bank.
The bond, which carried a coupon of 5.871%, was 7.2 times oversubscribed as "quality" investors subscribed to the offer.
AIB said the proceeds of that issuance are being used by it to meet certain funding requirements known as Minimum Requirement for own funds and Eligible Liabilities (MREL).
"Strong funding and capital ensure AIB is well positioned for sustainable growth, so we are very pleased to see the continuing demand from investors for our bond issuances," the bank's chief executive Colin Hunt said.
"The investor appetite for the perpetual bond we issued yesterday represents another strong vote of confidence in the bank as we embark on our new three-year strategy with a transformed, reshaped, and revitalised group," the CEO said.
"Our priorities for 2024 and beyond include an enhanced focus on our customers, further greening of our loan book and driving greater operational efficiency while delivering for our customers, our investors and the wider economy," he added.
The lead arranger group on the issuance was Bank of America, Goldman Sachs, Goodbody Stockbrokers, JP Morgan, Morgan Stanley and UBS.
