Irish Life Permanent plan to raise €1bn through bond sale

HOME LENDER Irish Life Permanent (IlP) is still planning to raise €1 billion through a bond sale as soon as markets stabilise, its chief executive said yesterday.

The bank recently signalled its intention to raise money from bond markets, and Denis Casey, its chief executive, said yesterday that it is still planning to go ahead with this over the next few weeks.

“What we indicated was that it was our intention to come to the bond market and to raise some funds under the Government guarantee over the next few weeks, subject to conditions in the markets,” he said.

“Clearly markets were very turbulent through late last week and early this week, so it’s our intention to visit markets as soon as a period of stability arrives.”

Last week, the institution, which specialises in mortgage lending and life products, said that it intended to raise funding with a bond backed by the State guarantee.

At the time, its spokesman said it would be a “benchmark” bond, meaning the figure involved would be at least €1 billion.

ILP is also planning to offer workers in its life division a career break similar to that offered to bank employees late last year as a cost-cutting measure.

Mr Casey said yesterday that about 140 people have signed up for the scheme, which involves the bank paying them €20,000 for a two-year break and €35,000 for three years.

He said that the success of the plan meant that the institution would offer a similar scheme to workers in its life and pensions business. He added that the scheme was a “win-win” as it allowed the group to trim costs but meant that there were no resulting job losses.

Mr Casey confirmed that ILP is continuing to talk with building society EBS about a possible merger. The two opened negotiations late last year.

The bank chief executive was a guest at the National College of Ireland yesterday, where he was the latest in a series of business leaders to do a question and answer session in front of students and academics.

After the session he said that he did not believe that the Government would nationalise ILP’s two rivals, AIB and Bank of Ireland.

He argued that the Minister for Finance Brian Lenihan had been very adamant that the Government had no intention of nationalising either institution, despite the fact that their share prices plunged again this week, and said there was no reason to doubt what he was saying.