Deatils of agreement with government about capital raising:
Allied Irish Banks Agrees Final Terms On Capital Raising Deal
LONDON -(Dow Jones)- Allied Irish Banks PLC (AIB), the troubled banking group, Friday said it has concluded discussions with the Government and has agreed the final terms of its capital raising transaction, pursuant to which it proposes to raise EUR5 billion of equity share capital from the National Pensions Reserve Fund Commission and up to EUR1.6 billion by the issue of contingent capital notes to the Minister for Finance.
MAIN FACTS:
-The capital raising will comprise an equity placing of ordinary share capital of EUR5 billion to the NPRFC an issue of new ordinary shares for cash at a price of EUR0.01 per share.
-The Contingent Capital Notes Issue will comprise an issue of contingent capital notes for cash, which will be subordinated tier 2 capital instruments with a five year and one day maturity denominated in units of EUR1,000, issued at par with an aggregate principal amount of up to EUR1.6 billion.
-The proceeds of the Placing, the Contingent Capital Notes Issue and the Capital Contribution will be used to fund the day-to-day operations of the Group.
-In certain circumstances, including if AIB's Core Tier 1 Capital ratio falls, or is likely in the opinion of the Central Bank to fall, below 8.25%, the Contingent Capital Notes will convert immediately and mandatorily in their entirety into ordinary shares at a conversion price of EUR0.01 per Ordinary Share.
-The Contingent Capital Notes carry a fixed annual mandatory interest rate of 10% of the principal amount, but this may be increased by the Minister up to a maximum amount of 18% per annum if the Contingent Capital Notes are to be sold by the Minister.
-It has been indicated to AIB by the Minister that it is his intention that any portion of the PCAR Requirement that has not been satisfied by the Capital Raising, other capital generating exercises undertaken by AIB and EBS and any further burden-sharing with the Group's subordinated debt holders, will be satisfied by way of a capital contribution to be made by the State to AIB once the Minister is satisfied that an appropriate level of burden-sharing has been achieved with the Group's subordinated debt holders.
-Shares at 1414 GMT up EUR0.01, or 5.6%, at EUR0.15 valuing the company at EUR1.84 billion.
-By Peter Evans, Dow Jones Newswires; 44-20-7842-9308; peter.evans@dowjones.com
(END) Dow Jones Newswires
07-01-11 1032ET
