March 15, 2013 / 12:05 PM / 5 years ago

Bank of Ireland launches new 500 mln euro bond

* Bond follows landmark sovereign issue on Wednesday

* 5-year covered bond attracts 1.3 bln euro in orders-IFR

DUBLIN, March 15 (Reuters) - Bank of Ireland launched a 500-million euro ($649 million) 5-year bond on Friday in a bid to capitalise on the positive sentiment towards Ireland evident following a landmark five-billion euro sovereign issue earlier this week.

The bank’s issue on Friday was significantly oversubscribed, attracting orders of over 1.3 billion euros, according to IFR, a Thomson Reuters news and market analysis service.

Ireland took its biggest step yet towards exiting its EU/IMF bailout on Wednesday by issuing its first benchmark 10-year bond in three years to meet nearly all its funding needs through next year.

Bank of Ireland, which is 15 percent owned by the state, on Friday followed suit by opening the books on a covered bond backed by Irish mortgages with pricing settling at mid-swaps plus 190 basis points, a Bank of Ireland spokeswoman said.

The bank will announce final details of the sale later on Friday, the spokeswoman said.

The only Irish lender to avoid full-state control, Bank of Ireland raised 1 billion euros ($1.3 billion) in November in its most significant bond issue in over three years.

Bank of Ireland’s main domestic rival, state-owned Allied Irish Banks, followed it later that month by raising 500 million euros through a three-year covered bond issue.

The government in January sold 1 billion euros it held in Bank of Ireland debt.

Like all Irish lenders, Bank of Ireland is battling to return to profitability. It reported a 40 percent drop in underlying profit for 2012.

Bank of Ireland said it had mandated Deutsche Bank , Morgan Stanley, Natixix and RBS to lead manage the issue.

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