AIB ready to return to bond markets

(19 Nov 2012)

AIB is ready to return to the bond markets and has confirmed to the Irish Independent that is has updated its "covered bond" programme

What this means is that the bank is now ready to issue new IOUs that are secured on Irish residential mortgages

The covered bond programme has fallen into disuse over the past three years.

Banks can borrow from the ECB at an interest rate of just 1pc, compared with the more than 3pc charged in the markets, but over-reliance on the central bank is seen as unhealthy. It means all banks are under pressure to "normalise" their funding base.

It is also reported that the banks plans also come as the Government's bank guarantee scheme is due to end next month.

For a full report please click on link

Irish Independent


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