Group successfully raises €525 million from capital markets through sale of €400 million of equity shares and issuance of Additional Tier 1 Capital of €125 million.

  • Transaction values Group at over €2 billion
  • As previously announced, Group will now return €410.5 million to Irish Government through repurchase of the Contingent Capital Notes
  • Group will now seek listing on main markets of Irish Stock Exchange and London Stock Exchange

permanent tsb Group Holdings plc has confirmed that it has successfully raised €525 million from the capital markets. The firm raised €400 million by the sale of 88.9m ordinary shares. The shares were priced at €4.50 per share which was at the top end of the price guidance issued last week reflecting strong investor interest in the transaction.

A further €125 million has been raised through the issuance of AT1 capital at a coupon (interest rate) of 8.625% to investors.

The Group will seek admission to the main market of the Irish Stock Exchange and the London Stock Exchange.

As a result of the sale of shares in this transaction and a separate transaction in which the Minster for Finance is selling 21.8m shares in the Group for €98m, the percentage of the Group owned by the Minister for Finance will now stand a c75% [down from 99.2% before today’s equity transaction].

The Group will now commence an Open Offer scheme through which it will allow existing investors to acquire shares on a one-for-one basis on the same terms and price as new investors received today. This Open Offer will close within the next three weeks.

Quote from Chairman Alan Cook

Speaking this evening, Mr. Alan Cook, Chairman of permanent tsb Group Holdings plc, described the successful capital raise as a “milestone” in the recovery of permanent tsb from the financial crisis which has gained momentum in recent months with the announcement of the successful deleverage of non-core portfolios and the European Commission approval of the Restructuring Plan.

Mr. Cook confirmed the Group would now return €410.5 million to the Government through the repurchase of the Contingent Convertible Notes which formed part of the Government’s recapitalisation of the Group, which was then called Irish Life & Permanent Group plc, in 2011.

Mr. Cook thanked the Minister for Finance for his continuing support for the Group;

We would not be in the improving position we are in were it not for the support through difficult years from the Minister for Finance and the Government. We thank the Minister and his team in the Department of Finance again for this support.

Quote from Group Chief Executive Jeremy Masding

Jeremy Masding said the level of investor interest in the transaction was “exceptional”. He said that since the plan to sell equity in the Group was announced, the senior management team had given over 100 investor presentations in Ireland, the UK, Europe and the United States.

Mr. Masding said that the success of today’s transactions underlined the potential of permanent tsb in the Irish banking landscape:

The investors we have spoken to see the potential of this bank to become an increasingly significant competitive force in the banking sector here. They know we continue to have challenges but they are confident that we can overcome them and grow a stronger, profitable and vibrant franchise in the market here.

Mr. Masding said that maximising shareholder value by delivering a great customer franchise would be the defining rationale for the Group:

We want to deliver sustainable shareholder value for our investors by building the most successful retail franchise in financial services in Ireland. To do so we must build and deliver great products and propositions that both deliver a return to our investors and deliver real benefits to our customers.

We understand that many of our customers continue to face challenges with their own finances and we have to lead the way in finding the right solutions for them whilst respecting the goals of our investors. Whether the issue is arrears management, variable mortgage rate pricing, deposit rate pricing or the management of legacy issues, we plan to demonstrate each day that we deserve the trust and confidence of existing and new customers.

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