Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (34081)	6/12/2009 4:20:16 AM
From: Madharry	Respond to of 78750

re aib: from yahoo poster: AIB bond exchange to boost capital: Shares in Allied Irish Banks rose by over 9 per cent in Dublin this morning after it announced a plan to exchange up to €2.7 billion worth of perpetual bonds for a new bonds in a move that may improve its core tier 1 capital by up to 10 per cent. At 9.30am AIB shares were trading at €2.17, a gain of 9.3 per cent and bringing the share price to levels last seen in early January. At this share price the bank has a market capitalisation of €1.9 billion, some €200 million behind Bank of Ireland. Under the proposal AIB is to bid for up to €2.7 billion across six petpetual bonds and is offering a premium over their current value. Because these bonds do not have a specified maturity date and are outside the Government guarantee they are trading at a significant discount estimated to be up to 35 per cent of face value. Although AIB has set different prices for each bond, on average investors will be offered around 50 cent in the euro. AIB said it will set the interest rates for its new bonds on June 22nd and until then the precise level of potential benefit to the bank remains unclear. In a note to investors Bloxham Stockbrokers said this morning it had previously said ”AIB could benefit to the tune of €700 million to €800 million from a hybrid buyback which would have provided a 10 per cent boost to existing core equity tier 1 capital of €7.7 billion”. According to Bloxham if a price of 44 cent was assumed and a take-up rate of 50 per cent achieved, “the net benefit to capital could be over €750 million”. Goodbodys said in a note to investors that if it is assumed that bond holders were happy to accept prices similar to that offered by Bank of Ireland that the take-up as a percentage of the amount of the securities outstanding was the same “it would realise a pre-tax profit of €910 million for AIB, adding 68 basis points to its equity tier 1 ratio.” BTW citi put its sell call on aib on 2/26/09 the stock is probably up 600% since that call. and now up another 6% in europe.