AIB has successfully raised €700 million through the issuance of a new bond aimed at institutional investors, offering an interest rate of 6%. The “Additional Tier 1” (AT1) perpetual bond, which is designed to help the bank meet its regulatory capital requirements, marks the first Euro AT1 deal of 2025 in Europe, signaling strong market confidence in the bank’s performance.
The AT1 bond is a form of debt that can be converted into equity or written off entirely if the bank’s capital strength falls below a predetermined level. As a result, these bonds are typically the highest-yielding bank bonds available, compensating investors for the additional risks involved.
AIB’s bond offering saw strong initial demand, peaking at €3.9 billion. This overwhelming interest allowed the bank to reduce the bond’s coupon rate from an initially planned 6.5% to 6%. The final investor book was mainly comprised of high-quality asset managers, with 57% of the investors based in the UK and Ireland, 19% from France, and the remaining 24% from other global regions, reflecting a broad and diverse range of investors.
The issuance represents AIB’s largest AT1 transaction to date, further strengthening the bank’s position in meeting its capital requirements.
Colin Hunt, CEO of AIB, expressed confidence in the bank’s future prospects, stating that the strong demand for the bond issuance reflects investor trust in AIB’s three-year strategy. “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,” Hunt said. He added that the issuance is a testament to AIB’s sustainable growth, driven by strong funding and capital.
Hunt also emphasized AIB’s ongoing commitment to enhancing customer focus, increasing sustainability efforts, and improving operational efficiency. “We continue to prioritize 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 noted.
The bond issuance was managed by a lead arranger group that included Bank of America, Goldman Sachs, Goodbody Stockbrokers, JP Morgan, Morgan Stanley, and UBS. This successful offering underlines AIB’s ability to access the international capital markets and reinforces the bank’s strong financial foundation moving forward.
