AIB has raised €700m from the issuance of a new bond to institutional investors, which offers an interest rate of 6%.
AIB said the "Additional Tier 1" (AT1) perpetual bond further supports the lender in meeting its regulatory capital requirements.
It also marks the first Euro AT1 deal of the year in Europe, which AIB said reflected market confidence in the bank's performance.
AT1s can be converted in to equity or written down entirely if the issuing bank's capital strength were to fall below a pre-determined trigger level. This means they are usually the highest-yielding bank bonds investors can buy, since bondholders expect to be compensated for the additional risks.
A perpetual bond is a bond with no maturity date, with characteristics of equity rather than debt.
AIB said that initial demand from investors was strong, peaking at €3.9 billion, enabling the bank to reduce the coupon on the bond down from the originally envisaged interest rate of 6.5%.
It said the investor book mainly consisted of high-quality asset managers, with UK/ Ireland investors accounting for about 57%, French about 19%, and the remaining 24% of orders spread across other regions. It said this provided a good breadth of investor interest.
AIB noted that the issuance was its largest AT1 transaction on record.
AIB's chief executive Colin Hunt said the bank is well positioned for sustainable growth through its strong funding and capital.
"We are delighted to again see strong demand from investors for our latest bond issuance, the first Euro Additional Tier 1 perpetual bond issued in Europe in 2025," Mr Hunt said.
"This is a vote of confidence in the bank's three-year strategy which we are implementing at pace. We continue to prioritise an enhanced focus on our customers, further greening our business and driving greater operational efficiency and resilience 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.
