DUBLIN, Feb 2 (Reuters) - Bank of Ireland offered on Wednesday to exchange 300 million euros ($415.3 million) of subordinated debt in return for government guaranteed securities at an average discount of around 56 percent to par.
The bank is in a race against time to avoid majority state control and must raise 2.2 billion euros by end-February to meet the tough capital requirements of its EU/IMF bailout package.
It raised 700 million euros in a bond exchange in December and even with about 100 million raised in Wednesday's offer -- focused on its remaining lower Tier 2 securities -- needs to find around 1.4 billion more this month.
Analysts are sceptical Bank of Ireland can raise the capital from private sources. They expect the government, which controls four of Ireland's six main lenders, to plug the gap, increasing Dublin's stake from 36 percent to around 70 percent.
Investors are steering clear of Irish banks amid uncertainty about how much more capital they will need when another review of the sector is completed at the end of March.
Standard & Poor's cut Ireland's rating by one notch to A- on Wednesday and warned it could strip the euro zone struggler of its 'A' credit status by April.
Ireland's central bank wants lenders to 'overcapitalise' as a result of the 85 billion euro emergency loan package agreed with the IMF and EU, raising its target for core Tier 1 capital ratio to 12 percent from 8 percent.
Bank of Ireland was the first major Irish bank to meet the previous capital target, raising 3 billion euros partly through private sources last year.
It said on Wednesday that holders of the Canadian dollar subordinated debt, maturing in 2015 and 2018, could exchange it for 2012 paper denominated in Canadian dollars or euros.
The offer closes on February 9.
Shares in the bank, the only pure lender still listed on Ireland's main stock exchange, were up 2.36 percent at 0.35 euro on Wednesday, just outperforming a general index.
($1=.7224 Euro)
(Reporting by Carmel Crimmins; Editing by David Hulmes) Keywords: BANKOFIRELAND/ (carmel.crimmins@reuters.com; Reuters Messaging: carmel.crimmins.reuters.com@reuters.net; +353 1 500 1529) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The bank is in a race against time to avoid majority state control and must raise 2.2 billion euros by end-February to meet the tough capital requirements of its EU/IMF bailout package.
It raised 700 million euros in a bond exchange in December and even with about 100 million raised in Wednesday's offer -- focused on its remaining lower Tier 2 securities -- needs to find around 1.4 billion more this month.
Analysts are sceptical Bank of Ireland can raise the capital from private sources. They expect the government, which controls four of Ireland's six main lenders, to plug the gap, increasing Dublin's stake from 36 percent to around 70 percent.
Investors are steering clear of Irish banks amid uncertainty about how much more capital they will need when another review of the sector is completed at the end of March.
Standard & Poor's cut Ireland's rating by one notch to A- on Wednesday and warned it could strip the euro zone struggler of its 'A' credit status by April.
Ireland's central bank wants lenders to 'overcapitalise' as a result of the 85 billion euro emergency loan package agreed with the IMF and EU, raising its target for core Tier 1 capital ratio to 12 percent from 8 percent.
Bank of Ireland was the first major Irish bank to meet the previous capital target, raising 3 billion euros partly through private sources last year.
It said on Wednesday that holders of the Canadian dollar subordinated debt, maturing in 2015 and 2018, could exchange it for 2012 paper denominated in Canadian dollars or euros.
The offer closes on February 9.
Shares in the bank, the only pure lender still listed on Ireland's main stock exchange, were up 2.36 percent at 0.35 euro on Wednesday, just outperforming a general index.
($1=.7224 Euro)
(Reporting by Carmel Crimmins; Editing by David Hulmes) Keywords: BANKOFIRELAND/ (carmel.crimmins@reuters.com; Reuters Messaging: carmel.crimmins.reuters.com@reuters.net; +353 1 500 1529) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.