Irish Nationwide Building Society (INBS) said it was happy yesterday with the progress it has made on its demutualisation programme, as the society announced its largest ever fund raising.

INBS has raised €1.3 billion in a dual tranche (euro and sterling) medium term note transaction. The latest issue brings the total raised by the society via euro-denominated medium-term notes (EMTN) since 2002 to about €6 billion.

David Murray, treasury manager at INBS, said the funds raised would be used for general funding purposes, including lending.

The five-year notes, arranged by BNP Paribas and Danske Bank, were met with solid demand from institutional investors, predominantly from Germany, the UK and Ireland, according to INBS.

The euro floating rate note tranche of €900 million was priced at 18 basis points above the three-month Euribor rate. This follows a £250 million Tier 2 funding in sterling last November. The co-leads in the deal were Davy, DZ Bank, LBBW and UBS.

Demand for the society's EMTN programme is likely to be driven by investor optimism that Irish Nationwide will eventually be bought in a trade sale later this year and that its new owner will have a higher credit rating. The price of the notes will then appreciate.

A spokeswoman for Irish Nationwide said that it continued to build up its business base in parallel with its demutualisation and sale plans. She said the society would continue to increase its balance sheet value, which the company describes as being exceptionally strong.

Icelandic bank Landsbanki is thought to be interested in buying INBS, while Bank of Ireland and Irish Life & Permanent have also said they would take a look at buying the business.

But it is understood that INBS is yet to appoint its own corporate advisers, while it is not clear if any interested parties have yet received a copy of a vendor due diligence report being prepared by KPMG.

A price tag in the region of €1.5 billion has been mooted for the society.