UK’s M&G Buys Up Most Equity in Bank of Ireland Bond Deal

UK asset manager M&G Investments has emerged as key to Bank of Ireland being able to remove €375 million of problem loans from its balance sheet. The investment group, a unit of London-based life insurance giant Prudential, has bought 95 per cent of the lowest rank notes – or equity portion – of a bond transaction Bank of Ireland used this month to refinance the non-performing, but mainly restructured, buy-to-let mortgages in the bond market, The Irish Times reported. The process, known as securitisation, entitles buyers of the bonds to interest payments based on income from the mortgages. M&G has bought almost all of the €41.5 million of so-called Z Notes in the deal, with higher ranked notes, from A to E, which have greater entitlements to income from the securitised loans, having been placed in recent weeks in the wider market. That’s according to bond prospectus documents linked to the deal. Read more