Ire

BKIR
http://noir.bloomberg.com/apps/quote?ticker=BKIR:ID
current shares outstanding 5,299 million
share price approximately 0.15 EUR
approximate market cap of 794 million EUR

http://www.bankofireland.com/about-boi-group/press-room/
http://www.bankofireland.com/about-boi-group/investor-relations/

The insolvent bank is only being kept afloat by the insolvent Irish govt.

So for the next few months / years while the market is sufficiently delusional to believe that the Irish govt is solvent, then the market will also silly enough to think that BKIR is solvent.

It needs to raise 4.2 billion EUR + 1.0 billion EUR = 5.2 billion EUR

************

http://www.rte.ie/news/2011/0603/boi-business.html

As it signalled earlier this week, the bank will offer to buy back debt held by two types of junior bondholders, for 10% or 20% of the original value of the bonds, with no payment of interest.

But bondholders can also opt to swap their debt for shares in the bank. If they take up this option, they will receive 20% or 40% of the original value of the bonds.

The bank also said it planned a rights issue, which will be underwritten by the State, at a price of 10 cent. The exact size will be announced after the results of the bond offers are known. Bank of Ireland said the maximum to be raised if all bondholders opted to take shares in the bank would be €1.76 billion. If all bondholders opted for cash, the maximum size of the rights issue would be €2.22 billion.
 
 
Summary of capital raising (as per above PDF file):

* capital to be raised is 4.2 billion "normal" capital + 1 billion contingent capital (debt that would convert into ordinary stock)

Components of 4.2 billion are:

* Liability Management Exercise:

> Cash or equity offer for holders of 2.6 billion EUR in tier 1 and tier 2 debt securities.

> Cash offer 20% for Tier 2 securities, with no payment for accrued interest
> Equity offer 40%, with payment for accrued interest

> equity conversion price (to be announced 23 June) to be between 0.1130 EUR and 0.1176 EUR, on ex-rights basis.

> "early participation results" to be released on Thurs 23 June, and full LME results to be announced on 8 July

* Rights issue

> rights issue at 0.10 EUR.
> size of rights issue between 1.77 billion EUR (all subordinated debt holders elect equity) and 2.23 billion EUR (all sub debt holders elect cash)
> precise size to be announced after completion of LME
> therefore approximate rights issue terms are between 3.3 new shares for 1 held (low end) and 4.2 for 1 (high end)

* Contingent capital 1 billion EUR

> to be placed with Irish govt
> 5 year, tier 2 subordinated debt, coupon 10%
> will convert into ordinary stock if 8.25% core tier 1 ratio breached
 
Page 3 of above PDF file contains a table outlining the percentage stakes of various shareholder groups under different scenarios, depending upon whether sub-debt holders elect to accept cash or equity, and whether rights issue is taken-up or not.

Minimum stock to be issued is 20.7 billion new shares (current shares outstanding 5.299 billion shares), with the vast majority of this to be under the rights issue (minimum stock to be issued in rights issue if 17.7 billion shares).

However despite the dilution, the LME allows BKIR to elimate 2.6 billion EUR of debt at a very low cost.

Under the LME, assuming a 100% equity take-up, bondholders only get 8.1 billion shares, worth less than 1 billion EUR.

Subordinated debtholders are getting a bad "deal". The offer of only 8.1 billion shares means that existing shareholders get to avoid additional share price declines, at the expense of sub-debt holders who are higher up in the capital structure.
 
Important dates for capital raising:

23 June
LME early bird results and announcements of exact equity conversion price for bondholders

7 July
Last date for LME acceptances

8 July
Announcement of LME final results

8 July
Announcement of Rights Issue size

12 July
Dealings in rights issue commence

26 July
announcements of results of rights issue
 
Quote from m22au:


However despite the dilution, the LME allows BKIR to elimate 2.6 billion EUR of debt at a very low cost.

Under the LME, assuming a 100% equity take-up, bondholders only get 8.1 billion shares, worth less than 1 billion EUR.

Subordinated debtholders are getting a bad "deal". The offer of only 8.1 billion shares means that existing shareholders get to avoid additional share price declines, at the expense of sub-debt holders who are higher up in the capital structure.
More...

Title = "U.S. Hedge Funds to Fight Bank of Ireland Restructuring "
http://online.wsj.com/article/SB10001424052702304392704576373391776187106.html?mod=googlenews_wsj

snippet:

The group of hedge funds has offered an alternative plan in which they would directly invest equity in the bank, and get more for their bonds. They haven't received a response from management or the Irish Ministry of Finance, Mr. Lauria said.

"Here you have existing investors willing to sit down and discuss putting in capital themselves ... and the Bank of Ireland hasn't yet perused that option in any meaningful way," Mr. Lauria said.
 
Title:

"Bank of Ireland Bondholders Organize to Join Effort to Inject Required
Capital, to Bolster Planned Capital Raising and to Oppose Announced Liability Management Exercise"

http://noir.bloomberg.com/apps/news?pid=conewsstory&tkr=BKIR:LN&sid=a0i1fbiw_8rI

http://www.streetinsider.com/Press+...ed+Liability+Management+Exercise/6573851.html

snippet:

"While the BOI Investor Committee is committed to engaging on a consensual basis, it believes that the Bank's LME is fatally flawed because it fails to respect the fundamental principle that creditors must be paid ahead of shareholders.

"In particular, the LME contemplates that BOI LT2 subordinated capital will suffer as much as an 80% discount while BOI's preferred equity remains unimpaired and its common shareholders retain significant value. "

Contact:
Tom Lauria, White & Case LLP,
New York: +1-212-819-2637,
Miami: +1-305-995-5282;

Stephen Phillips, White & Case LLP,
London: +44(0)20-7532-1221
 
On 23 June, BKIR provided the "early bird" update for the LME.

Link:
http://www.londonstockexchange.com/...rket-news-detail.html?announcementId=10900887

A significant majority (95.4%) of acceptances to date have elected to receive stock in exchange for debt.

"The final closing date for the LME (other than the Canadian Dollar 2015 Notes) is 7 July 2011."


Quote from m22au:

Important dates for capital raising:

23 June
LME early bird results and announcements of exact equity conversion price for bondholders

7 July
Last date for LME acceptances

8 July
Announcement of LME final results

8 July
Announcement of Rights Issue size
More...
 
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