FBD sells €50m of junior bonds to help repay Fairfax

FBD Holdings sold €50 million of junior bonds on Tuesday to help finance a deal to repurchase and cancel notes sold to Canadian financial group Fairfax three years ago to shore up its balance sheet at a time when the Irish insurer was loss making.

The Dublin-based company, led by chief executive Fiona Muldoon, said on Monday that it planned to redeem and cancel the €70 million of convertible bonds that were sold to Fairfax in 2015.

FBD will pay Fairfax €86 million in a deal that will also cancel the Toronto-based group’s right to convert the notes into a 19 per cent equity stake in Ireland’s only indigenous, publicly quoted insurer from next year.

The new so-called Tier 2 subordinated notes were priced on Tuesday to carry a coupon – or interest rate – of 5 per cent, some two percentage points below the rate attached to the 2015 bonds. Goodbody Stockbrokers managed the transaction.

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“The strong pricing achieved by FBD is an endorsement and acknowledgement of the progress that FBD has made in recent years,” Ms Muldoon said.