IRISH LIFE & Permanent (ILP) has raised funding without the support of the Government bank guarantee for the first time since it was introduced in September 2008.
A spokesman for the company said it raised €250 million in unguaranteed debt maturing in less than two years using ILP residential mortgages as collateral through its Fastnet securitisation programme.
The money was raised in a private transaction.
The spokesman declined to disclose the cost or the identity of the investors providing the funding, but said they were foreign and the net cost was lower than guaranteed funding.
“It is an early sign of returning confidence, and we are happy with that,” he said.
The sovereign debt crisis has stopped the six domestic lenders raising unguaranteed funding despite Bank of Ireland’s successful recapitalisation in June.
The bank tested the appetite among debt investors after boosting capital by €2.9 billion but has not yet raised any large-scale funding outside the guarantee.
The bank raised 425 million Swiss francs (€322 million) in a private deal under the guarantee last month.
It said it regularly raised both guaranteed and unguaranteed debt privately.
ILP is the first big funding deal to be raised without the support of the guarantee since AIB raised €750 million on a five-year unguaranteed bond last November.
“It is good that they got some sort of issue away, but without knowing the terms and pricing it is hard to say how good,” said bank analyst Sebastian Orsi at stockbroking firm Merrion Capital.
“It is beneficial that it is lower than the cost of raising funding under the guarantee.”
AIB managing director Colm Doherty and Anglo Irish Bank chief executive Mike Aynsley have called on the Government to extend the bank guarantee beyond the end of the year to prevent a funding crisis at the Irish banks.
The blanket guarantee is due to end at the end of next month, while an extended guarantee, introduced in 2009, allows institutions to raise funding by the end of this year on bonds of up to five years.
Central Bank governor Patrick Honohan has said any extension of the guarantee should be done in “quarters rather than years”.
