This article appeared in Finance Magazine

IL&P raises €500 million through FRN issue
Irish Life & Permanent (IL&P), Ireland€s largest residential mortgage lender, has secured e500 million in the senior Floating Rate Note (FRN) market.

The five-year transaction matures on 25 April 2008 and was priced at an all-in cost of 17.5bps over LIBOR. The deal was rated A1 by Moody€s and A+ by Standard and Poor€s.

Speaking to FINANCE magazine, Peter McCabe, head of financial institutions with IL&P, said, €Markets were very tight in Q4, 2002 and Q1, 2003 reflecting economic uncertainties exacerbated by the Gulf situation which caused investors to remain liquid rather than lock in to term debt. However, with the returning confidence in the market in March, IL&P were approached by several major UK and US banks to say that there was a strong appetite for good A1 paper at the time. We decided to avail of this opportunity and, after a short tendering process, chose the two joint lead banks, Barclays Capital and JP Morgan Chase Bank both of whom are strong relationship banks of IL&P.

Commenting on the demand for the deal, McCabe said that IL&P were very pleased with the broad investor base that the issue attracted and the fact that the deal was oversubscribed even at, what was considered to be, relatively tight pricing.

The transaction was a public issue under IL&P€s medium-term note (MTN) programme. The wholesale funding is designed to supplement its retail and commercial deposit base.
To facilitate the issue of paper IL&P has, over the past few years, established three funding programmes: a STG£5 billion MTN programme, a $2 billion US commercial paper programme and a €2 billion Euro commercial paper programme.

The deal represents IL&P€s first public issue since March 2001- it has relied solely on smaller private deals and the use of their two commercial paper programmes for the wholesale funding requirements in 2002.

Joint book runners Barclays Capital and JP Morgan confirmed that there was a good appetite for the IL&P name and the availability of lines was never in question - merely the pricing and value. The mandate was awarded on a Tuesday and had closed by Thursday lunchtime with bank funds and treasuries taking up the bulk of the distribution and some interest from asset managers.
This article appeared in the May 2003 edition of Finance Magazine.