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Rating: A3/A- (Moody's/Fitch)
Amount: Eu750m
Maturity: October 12, 2009
Issue/re-offer price: 99.762
Coupon: three month Euribor plus 20bp
Launched: Tuesday October 28
Joint books: BNP Paribas, Danske Bank, Davy, WestLB
Borrower's comment:
We started out with an open mind on what we wanted, with the target of launching a three or five year transaction of between Eu300m and Eu500m. Spreads have narrowed between three and five years so the five year part of the curve has cheapened up from our point of view.
During the first part of the week when we roadshowed the credit, investor preferences tended to lean towards the three year tenor, but as the week progressed we realised that accounts were beginning to prefer the five year.
We therefore changed our view and opted for the longer maturity with confidence from the feedback we were getting that we could do a Eu500m transaction.
By the time we priced the deal, the order book stood at over Eu1.1bn, allowing us to launch a Eu750m issue that was still comfortably oversubscribed, ensuring performance in the secondary market.
As part of the roadshow, we made it clear to investors that it is highly likely we will demutualise in the next two years because legislation governing Ireland's building societies is being amended.
We expect the legislation to be published in the next few weeks and the whole bill to be enacted by Easter next year. We also expect to be bought out by a better rated credit as a result of this.
There are two other building societies in our peer group in Ireland, the main one being EBS which is larger than us and is a similarly rated institution.
We have one other deal outstanding in euros from October 2002. That was a three year Eu250m transaction. We have accessed the sterling market for a tap this year.
We felt the timing was right and the pricing was adequate. As an institution we can offer rarity value and our A3/A- rating is appealing to investors.
We have a strong balance sheet which has doubled in size over the last four years, and we feel that we should have a higher rating, which is something we are working towards.
Also, we have one of...