SOURCE: Allied Irish Banks, p.l.c.

June 16, 2009 05:27 ET

ALLIED IRISH BANKS P.L.C. PRICING ANNOUNCEMENT

DUBLIN, IRELAND--(Marketwire - June 16, 2009) -


                           16th June 2009
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN THE UNITED STATES OR
                                ITALY
  ALLIED IRISH BANKS, P.L.C. AND AIB CAPITAL EXCHANGE OFFERING 2009
LIMITED ANNOUNCE NEW NOTES COUPON, NEW NOTES YIELD, NEW NOTES PRICE,
NEW NOTES MATURITY AND EXCHANGE RATIO IN RELATION TO EXCHANGE OFFERS
                           in relation to
                         any and all of the
  EUR 200,000,000 Perpetual Subordinated Callable Step-Up Notes (ISIN: XS0100325983)
                    (the "Euro Perpetual Notes")
  £400,000,000 Perpetual Callable Step-Up Subordinated Notes (ISIN: XS0227409629)
                  (the "Sterling Perpetual Notes")
   EUR 500,000,000 7.50 per cent. Step-Up Callable Perpetual Reserve
  Capital Instruments (ISIN: XS0120950158) (the "RCIs" and together
 with the Euro Perpetual Notes and the Sterling Perpetual Notes, the
                            "AIB Notes")
                         any and all of the
    AIB UK 2 LP EUR 500,000,000 Fixed Rate/Floating Rate Guaranteed
 Non-voting Non-cumulative Perpetual Preferred Securities having the
  benefit of a subordinated guarantee of Allied Irish Banks, p.l.c.
              (ISIN: XS0257734037) (the "AIB UK 2 PPS")
    AIB UK 3 LP £350,000,000 Fixed Rate/Floating Rate Guaranteed
 Non-voting Non-cumulative Perpetual Preferred Securities having the
  benefit of a subordinated guarantee of Allied Irish Banks, p.l.c.
              (ISIN: XS0257571066) (the "AIB UK 3 PPS")
      and up to EUR 700,000,000 in aggregate nominal amount of the
   AIB UK 1 LP EUR 1,000,000,000 Fixed Rate/Floating Rate Guaranteed
 Non-voting Non-cumulative Perpetual Preferred Securities having the
  benefit of a subordinated guarantee of Allied Irish Banks, p.l.c.
(ISIN: XS0208105055) (the "AIB UK 1 PPS" and together with the AIB UK
                                2 PPS
                  and the AIB UK 3 PPS, the "PPS")

On 11 June 2009, Allied Irish Banks, p.l.c. (the "Bank") announced that it was inviting all holders of AIB Notes (subject to certain restrictions set out in the Exchange Offer Memorandum (as defined below)) to exchange any and all of their AIB Notes for (i) Sterling New Notes in the case of the Sterling Perpetual Notes and (ii) Euro New Notes (together with the Sterling New Notes, the "New Notes"), in the case of the Euro Perpetual Notes and RCIs (the "AIB Exchange Offer") and AIB Capital Exchange Offering 2009 Limited ("AIB Capital") announced that it was inviting all holders of PPS (subject to certain restrictions set out in the Exchange Offer Memorandum (as defined below)) to exchange (i) any and all of their AIB UK 2 PPS for Euro New Notes, (ii) any and all of their AIB UK 3 PPS for Sterling New Notes and (iii) up to EUR 700,000,000 in aggregate nominal amount of their AIB UK 1 PPS for Euro New Notes (together, the "LP Exchange Offer"). Notwithstanding the expected announcement date of key events relating to the Exchange Offers as set out in the section entitled "Indicative Exchange Offer Timetable" in the exchange offer memorandum dated 11 June 2009 (the "Exchange Offer Memorandum") or as otherwise specified in the Exchange Offer Memorandum, the Bank and AIB Capital hereby announce the following terms in relation to the New Notes to be issued in connection with each of the AIB Exchange Offer and LP Exchange Offer (as applicable):

Euro New Notes Coupon:       12.500 per cent. per annum
Sterling New Notes Coupon:   12.500 per cent. per annum
Euro New Notes Yield:        12.500 per cent. per annum
Sterling New Notes Yield:    12.500 per cent. per annum
Euro New Notes Price:        100 per cent.
Sterling New Notes Price:    100 per cent.
Euro New Notes Maturity:     The date falling 10 years after the
                             Settlement Date (currently expected to
                             be 25 June 2019)
Sterling New Notes Maturity: The date falling 10 years after the
                             Settlement Date (currently expected to
                             be 25 June 2019)
Euro Perpetual Notes         0.670000
Exchange Ratio:
Sterling Perpetual Notes     0.620000
Exchange Ratio:
RCIs Exchange Ratio:         0.600000
AIB UK 1 PPS Exchange Ratio: 0.500000
AIB UK 2 PPS Exchange Ratio: 0.520000
AIB UK 3 PPS Exchange Ratio: 0.500000

The New Notes will be 10 year bullet dated subordinated Lower Tier 2 and are expected to have ratings of: A1 (neg) / A- (neg) / BBB+ by each of Moody's Investors Service Ltd, Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies and Fitch Ratings Ltd respectively. Notwithstanding the expected announcement date of key events relating to the Exchange Offers as set out in the section entitled "Indicative Exchange Offer Timetable" in the Exchange Offer Memorandum or as otherwise specified in the Exchange Offer Memorandum, the Bank and AIB Capital expect to announce (i) the Accrued Interest and Distribution Amount (as applicable), (ii) the Pro-Ration Factor (if applicable), (iii) the aggregate nominal amount of AIB Notes accepted for exchange by the Bank, (iv) the aggregate nominal amount of PPS accepted for exchange by AIB Capital, (v) the aggregate nominal amount of New Notes to be issued, (vi) the New Notes Spread and (vii) the Euro Mid Swap Maturity and the Sterling Mid Swap Maturity (as applicable), on or about Monday 22 June 2009. This announcement has been made in accordance with the exchange offer memorandum dated 11 June 2009 (the "Exchange Offer Memorandum"). Capitalised terms used and not otherwise defined in this announcement have the meaning given in the Exchange Offer Memorandum. GENERAL Holders are advised to read carefully the Exchange Offer Memorandum, as applicable, for full details of, and information on, the procedures for participating in any Exchange Offer. Subject to applicable law and as provided in the Exchange Offer Memorandum, (i) the Bank may, in its sole discretion, extend, re-open, amend, waive any condition of or terminate the AIB Exchange Offer at any time and (ii) AIB Capital may, in its sole discretion, extend, re-open, amend, waive any condition of or terminate the LP Exchange Offer at any time. Requests for information in relation to the pricing of the Exchange Offers should be directed to the Dealer Managers:


                THE DEALER MANAGERS

            J.P. Morgan Securities Ltd.
                  125 London Wall
                  London EC2Y 5AJ

For information by telephone:  +44 (0) 20 7777 1333
Attention:  Sebastien Bamsey - Liability Management
      Email:  sebastien.m.bamsey@jpmorgan.com

For information by telephone:  +44 (0) 20 7779 2468
    Attention:  Richard Howard - FIG Syndicate
       Email:  richard.v.howard@jpmorgan.com

      Morgan Stanley & Co. International plc
                  25 Cabot Square
                   Canary Wharf
                  London E14 4QA
For information by telephone:  +44 (0) 20 7677 5319
 Attention: Elizabeth Esrov - Liability Management
     Email:  Elizabeth.Esrov@morganstanley.com
For information by telephone:  +44 (0) 20 7677 7070
      Attention: Daniel Shane - FIG syndicate
       Email: Daniel.Shane@morganstanley.com

Requests for information in relation to the procedures for tendering AIB Notes or PPS in, and for any documents or materials relating to, the Exchange Offers should be directed to the Exchange Agent:

                THE EXCHANGE AGENT

           Lucid Issuer Services Limited
                    Leroy House
                  436 Essex Road
                   London N1 3QP

For information by telephone:  +44 (0) 20 7704 0880
      Attention:  David Shilson / Yves Theis
              Email: aib@lucid-is.com

DISCLAIMER

This announcement must be read in conjunction with the Exchange Offer Memorandum. This announcement and the Exchange Offer Memorandum contain important information which must be read carefully before any decision is made with respect to the AIB Exchange Offer and/or the LP Exchange Offer. If any Holder is in any doubt as to the action it should take, it is recommended to seek its own legal, tax, and financial advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent financial adviser. Any individual or company whose AIB Notes or PPS are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to tender such AIB Notes or PPS in the AIB Exchange Offer or LP Exchange Offer, as applicable. None of the Bank, AIB Capital, AIB UK 1 LP, AIB UK 2 LP, AIB UK 3 LP, the Dealer Managers, the Exchange Agent, or any person who controls, or is a director, officer, employee or agent of such persons, or any affiliate of such persons, makes any recommendation as to whether Holders should tender AIB Notes or PPS and/or accept the New Notes in the relevant Exchange Offer.

No offer or invitation to acquire or exchange any securities is being made pursuant to this announcement. Nothing in this announcement or the Exchange Offer Memorandum constitutes an invitation to participate in the Exchange Offers in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such an invitation under applicable securities laws. Offers to Exchange AIB Notes or PPS pursuant to the relevant Exchange Offer will not be accepted from Holders in any jurisdiction where such invitation or offer to exchange is unlawful.

The distribution of this announcement and the Exchange Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement or the Exchange Offer Memorandum come are required by each of the Bank, AIB Capital, AIB UK 1 LP, AIB UK 2 LP, AIB UK 3 LP, the Dealer Managers and the Exchange Agent to inform themselves about, and to observe, any such restrictions.

OFFER RESTRICTIONS

United States

Each Exchange Offer is not being made, and will not be made, directly or indirectly, in or into, or by use of the mail of, or by any means or instrumentality of interstate or foreign commerce of or of any facilities of a national securities exchange of, the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act). This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone and the internet. Accordingly, copies of this announcement and the Exchange Offer Memorandum and any other documents or materials relating to the relevant Exchange Offer are not being, and must not be, directly or indirectly, mailed or otherwise transmitted, distributed or forwarded (including without limitation, by custodians, nominees or trustees) in or into the United States or to U.S. persons and neither the AIB Notes nor the PPS can be Offered for Exchange by any such use, means, instruments or facilities or from within the United States or by U.S. persons. Any purported Offer to Exchange AIB Notes or PPS resulting directly or indirectly from a violation of these restrictions will be invalid, and any purported Offer to Exchange made by a U.S. person, a resident of the United States or from within the United States or from any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States or for a U.S. person will be invalid and will not be accepted.

Each of this announcement and the Exchange Offer Memorandum is not an offer of securities for sale in the United States or to U.S. persons. None of the AIB Notes, the PPS and the New Notes have been, or will be, registered under the Securities Act or the securities laws of any state or jurisdiction of the United States, and may not be offered, sold or delivered, directly or indirectly, in the United States or to, or for the account or benefit of U.S. persons. The purpose of this announcement and the Exchange Offer Memorandum is limited to the Exchange Offers, and none of this announcement or the Exchange Offer Memorandum may be sent or given to any person other than in an offshore transaction in accordance with Regulation S under the Securities Act.

Each Holder of AIB Notes or PPS participating in the relevant Exchange Offer will represent that it is participating in such Exchange Offer in accordance with Regulation S under the Securities Act and that it is not participating in the relevant Exchange Offer from within the United States nor is it a U.S. person or an agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States or for a U.S. person. United Kingdom

The communication of this announcement, the Exchange Offer Memorandum and any other documents or materials relating to the Exchange Offers is not being made and such documents and/or materials have not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom, and are only for circulation to persons outside the United Kingdom or to persons within the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order")) or within Article 43(2) of the Order, or to other persons to whom it may lawfully be communicated in accordance with the Order.

Italy

The Exchange Offers are not being made in the Republic of Italy. The Exchange Offers, this announcement and the Exchange Offer Memorandum have not been submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa ("CONSOB") pursuant to Italian laws and regulations. Accordingly, Holders are hereby notified that, to the extent such Holders are persons resident and/or located in the Republic of Italy, no Exchange Offer is available to them and they may not Offer to Exchange AIB Notes or PPS pursuant to the relevant Exchange Offer nor may the New Notes be offered, sold or delivered in the Republic of Italy and, as such, any electronic instruction notice received from or on behalf of such persons shall be ineffective and void, and neither this announcement nor the Exchange Offer Memorandum nor any other offering material relating to the Exchange Offers, the AIB Notes, PPS or the New Notes may be distributed or made available in the Republic of Italy.

Ireland

The Exchange Offers are not being made, directly or indirectly, to the public in Ireland and no offers or sales of any notes or securities under or in connection with such Exchange Offers may be effected except in conformity with the provisions of Irish law including the Irish Companies Acts 1963 to 2006, the Prospectus (Directive 2003/71/EC) Regulations 2005 of Ireland, the European Communities (Markets in Financial Instruments) Regulations 2007 of Ireland and the Market Abuse (Directive 2003/6/EU) Regulations 2005 of Ireland. Other Each Exchange Offer is subject to further offer and distribution restrictions in, amongst other countries, Belgium and France, as more fully set out in the Exchange Offer Memorandum. The distribution of this announcement and the Exchange Offer Memorandum in those jurisdictions is restricted by the laws of such jurisdictions.


-ENDS-

For further information please contact:
Catherine Burke
Rose O'Donovan
Head of Corporate Relations
Group Investor Relations Manager
AIB Group
AIB Group Dublin 4
Dublin 4
Tel:  + 353 1 6413894
Tel:  + 353 1 3414191


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