Allied Irish to make $2.5 bln on buyback -report

DUBLIN, Jan 23 (Reuters) - Allied Irish Banks is poised to make 1.9 billion euros ($2.57 billion) on a heavily discounted buy-back of subordinated debt, The Sunday Times reported, quoting unnamed sources.

Allied Irish has offered to buy back a total of 3.9 billion euros of subordinated debt at a 70 percent discount, broadly in line with secondary market levels, in a bid to cut its capital needs.

The deadline for the tender closed on Friday and the bank is expected to announced the details early next week.

After fellow lender Bank of Ireland ran a similar exercise last month and got a 45 percent take-up, analysts expected demand of around 50 percent for Allied Irish's offer, but the Sunday Times quoted sources as saying the final outcome would now be closer to 75 percent.

A take-up of 70 percent of the total, at the 70 percent discount, would amount to a gain of about 1.9 billion euros, by Reuters calculations.

A spokeswoman for the bank said it would not comment on the report.

Allied Irish, effectively nationalised late last year after a 3.7 billion euro state capital injection, needs to raise an additional 6.1 billion capital by the end of February to meet new targets set under Ireland's 85 billion euro IMF/EU bailout.

(Reporting by Padraic Halpin; Editing by Will Waterman)

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