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1
A number of statements we will be making in our presentation and in the accompanying slides will not be based on historical fact,
but will be “forward-looking” statements within the meaning of the United States Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those projected in the forward looking statements. Factors that could cause actual results to differ
materially from those in the forward looking statements include, but are not limited to, global, national and regional economic conditions,
levels of market interest rates, credit or other risks of lending and investment activities, competitive and regulatory factors and
technology change. Any ‘forward-looking statements made by or on behalf of the Group speak only as of the date they are made.
The following commentary is on a continuing operations basis. Any growth percentages (excl. EPS) are shown on an underlying basis,
adjusted for the impact of exchange rate movements on the translation of foreign locations’ profit and excluding interest
rate hedge volatility.
AIB Mortgage Bank Asset Covered Securities
April 2010
2
AgendaAgenda
Allied Irish Banks
Key events 2008 – 2010
Pro-forma Post Nama & Disposals Loan Books
AIB Mortgage Book
Funding
Irish Economy
Asset Covered Securities - Ireland
AIB Mortgage Bank
3
Allied Irish Banks – key events 2008 - 2010Allied Irish Banks – key events 2008 - 2010
2008 Q 4 announcements Ratings Aa2 / A+ / AA- Sept. – Irish Govt announces bank liability guarantee scheme
2009 H 1 announcements March 2008 Dividend missed, Board changes, Ch, CEO,CFO May €3.5b Preference Shares + warrants issued to Gov’t June € 2.4b Capital buy back creates € 1.1b gain
2009 H 2 announcements Aug. Press statement – potential equity investment Sept. Gov’t proposals for new Guarantee Scheme (ELG) & NAMA proposals, total scheme at c. €84b.of Prop.& Const. loans , AIB €24b Sept. & Nov. AIB re-enters unguaranteed 3yr & 5yr bond market Nov. Further Board appointments Dec. EC ruling requires AIB to defer ‘may pay coupons’ T (i) & Upper T (ii) Dec. Shareholder EGM votes to accept NAMA participation
2010 March announcements
€1.8b Lw T(ii) Exchange, generates Core T(i) €445m Regulator requires AIB to raise equivalent of €7.4bn of capital; targeting a Equity T1 ratio of 7% First tranche of NAMA loans €3.3b @ 42% discount Ratings A1 / A-(n) / A-
4
Pro-forma post NAMA, post disposal Pro-forma post NAMA, post disposal
Loan Book Capital Markets c. €22.4bn
Well spread across sectors and geographies Emerging signs of stability
Republic of Ireland c. €58.4bn
22%
21%11%
46%
Mortgages
Property & Construction
Other Commercial
Other Personal
Reorganisation of credit and risk functions
Targeted equity ratio 7%, core tier one ratio 8%
Significantly de-risked and recapitalised profile
5
AIB Bank Republic of Ireland – Total Mortgage BookAIB Bank Republic of Ireland – Total Mortgage Book
Total book €27.1bn, up 6% in 2009 c. 36% share of all new business written in the Irish market
Borrower profile
64%
29%
7%
Owner occupier Buy to let Staff / others
Arrears profile remains better than peers 90+ days 1.96% including impaired loans of €429m
Buy to let arrears more than twice owner occupier level of 1.5%
Bad debt charge €91m in 2009, 35 bps of average mortgages Unemployment to determine future loss levels
AIBMB’s Historical Quarterly Cover Asset Pool Data – provided on web site
6
Allied Irish Banks – 2009 - Funding Allied Irish Banks – 2009 - Funding
Solid funding base in still challenging conditions Customer deposits 51% of funding, up from 49%
at June
Loan deposit ratio 146% (123% excluding held for sale assets NAMA), down from 156% at June
2 successful non Government guaranteed bond issues in H2
ELG facilitates guaranteed issuance out to 5 years
€48bn in qualifying liquid assets / contingent funding at year end and continuing to increase capacity
NAMA bonds to significantly improve liquidity profile
Balanced funding maturity profile post 2010
Funding from monetary authorities not material
0
20
40
60
80
100
June 2009 Dec 2009
%
49%
19%
4%3%
8%
7%
10%
51%
15%
6%3%
5%
10%
10%
Senior Debt
Capital
Deposits by banks – unsecured
Deposits by banks – secured
Customer a/cs
ACS
CDs & CPs
7
Irish EconomyIrish Economy
Economic Performance in Recent Years
Impact of housing downturn from 2007
Housing sector remains weak
Mortgage debt in decline
Framework for recovery
Improving economic conditions
Public finances stabilise
Irish Economic Data & Forecasts 2006 -2011
Stronger Performance from 2012
8
Economic Performance Economic Performance Irish economy outperformed strongly from
1994 to 2007
Rapid growth in domestic demand took over from traded sector as main driver of growth
Big rise in employment from 1994 – 2007 with large inward migration. Period of very low unemployment
But, economy entered recession in 2008 for first time since 1982
GDP declined by 3% in 2008 after 14 years of buoyant growth
Sharp decline in GDP of some 7% in 2009: further contraction likely in 2010
Housing collapse knocks some 10% directly off GDP in 2007-2010
Deep global recession also impacts on very open Irish economy
Very sharp tightening of Irish fiscal policy depressing activity even further
GDP GROWTH 1994-2011 (%)
-8
-4
0
4
8
12
1994 1996 1998 2000 2002 2004 2006 2008 2010
Ireland
Euro Area
Source; CSO, Eurostat, AIB ERU Forecasts
Labour Force and Employment Growth Y/Y % Change
-9
-6
-3
0
3
6
Q1-01 Q1-02 Q1-03 Q1-04 Q1-05 Q1-06 Q1-07 Q1-08 Q1-09
Labour Force Employment
%
Source; CSO
9
Impact of housing downturn on economy Impact of housing downturn on economy
Housing became a very large sector of economy - over 14% of GDP in 2005/06
Sharp fall in house building activity knocks around 10% off GDP: some 2% in 2010
Housing completions fell to 26,000 in 2009 from 88,000 in 2006.
Housing investment to fall further to close to 3% of GDP in 2010/11 (an 80% contraction)
Big drop in house prices of 45-50%
50% fall in construction employment
Significant negative knock-on effects on household spending and confidence
Big hit on government finances via a sharp decline in property taxes and rising cost of unemployment benefit
Banking system hit by rising bad debts in property sector, curtailing credit, with banks requiring State support
National House Price Inflation
-4
-3
-2
-1
0
1
2
Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09
-20
-16
-12
-8
-4
0
4
8
12
16
Month-on-Month : LHS Year-on-Year : RHS
% %
Source: permanent tsb/ESRI
Housing Investment as % of GDP
0
3
6
9
12
15
1995 1997 1999 2001 2003 2005 2007 2009 2011(F) 2013(F)
Source: CSO; AIB ERU Forecasts
10
Housing sector remains weakHousing sector remains weak
Housing output to fall further to 10,000 units in 2010 and 8,000 in 2011 from 26,000 in 2009 and almost 90,000 at peak
Very low level of new construction activity. Commencements have declined to a seasonally adjusted annualised rate of only 6,000
Once-off builds account for over 70% of starts. Multi-unit developments running at a seasonally adjusted annualised rate of just 1,500 units
Migration flows have turned negative. Outflow of -50,000 estimate in year to April 2010 v 2006/07 inflows of 70,000 per annum
Outward migration depressing demand but population growth still supportive.
Forecast demand for 20,000 – 25,000 units per annum over 2010-2012; longer term demand of 35,000-40,000
Very low levels of new supply will help erode excess stock
Prices continue to adjust lower but recent indications are that pace of decline is slowing
Housing Completions
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
1970 1975 1980 1985 1990 1995 2000 2005 2010 (f)
Source: CSO; DoEHLG and AIB ERU forecasts
House Commencements
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09
0
10
20
30
40
50
60
70
80
90
100
Source: DoEHLG, AIB ERU Calculations
3 Month Moving Average Seasonally Adjusted Annualised Rate : LHS
Single Units as Percentage of Total Commencements : RHS
11
Mortgage debt in declineMortgage debt in decline Strong increase in personal sector
indebtedness to 2007 – largely mortgage related (85% of household debt)
Residential mortgage indebtedness grew from under €25bn at end 1999 to €123bn at end 2007
Rate of growth in mortgage debt outstanding has turned negative
28,333 mortgages (3.6% of total) more than 3 months in arrears in Q4 2009
Still extremely low level of repossessions – especially from main stream lenders
Repayment affordability at best level since 1995 but set to deteriorate
Wage cuts and tax increases impacting
on disposable income
Mortgage rates are on the rise as lenders
increase margins
Residential Mortgage Lending Adjusted* Series: YoY % Change
-5
0
5
10
15
20
25
30
Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
%
Source: CBFSAI
* Adjusted for Securitisations and Reclassifications
Personal Sector Debt Ratio (%)Debt/ Disposible Income
0
20
40
60
80
100
120
140
160
180
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (e)
Source: CSO, CB&FSAI, AIB ERU Forecasts
12
Framework being put in place for economic recoveryFramework being put in place for economic recovery Rebalancing of the economy
Much lower exposure to construction
BoP moving towards balance with increased focus on exports
Recovery in household savings with private debt levels falling
Fiscal consolidation Corrective fiscal measures of 7.5% of GDP in 2009-2010
Budget deficit stabilised
Further but more modest corrective fiscal measures in store post 2010
Resolving banking crisis Transfer of P & C loans to NAMA in 2010
Recapitalisation of banking system – Gov injects substantial funds
Improving the flow of liquidity
Improving competitiveness Engineering a real devaluation
Wages and prices in marked decline. House prices and rents fall sharply
International recovery now underway FDI into Ireland rose in 2009 (UNctad) and world trade now recovering
13
Economy now stabilisingEconomy now stabilising Manufacturing PMI hit 53.0 in March, its
highest level since Sept 2007
Services PMI at 49.6 in March, the best level since January 2008
Retail sales have bottomed out
Car sales surge on scrappage scheme
Home sales pick up and rents stabilising
Consumer confidence on the rise
Industrial production held up reasonably well in 2009 and rose strongly in Jan 2010
Strong pick up in service exports in H2 ‘09
BoP deficit halved in 2009
Rate of increase in Live Register has moderated markedly since mid-2009
Decline in monthly redundancy numbers evident since mid-2009
Ireland Composite PMI and GDP (Y/Y % Change)
30
35
40
45
50
55
60
65
Q1 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010
-12.0
-8.0
-4.0
0.0
4.0
8.0
12.0
Source: Thomson Datastream & AIB ERU
Composite PMI (LHS)
GDP Y/Y % Change (RHS)
Unemployment Rate (%)
4
6
8
10
12
14
Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10
Source : Thomson Datastream
14
Key indicators improvingKey indicators improving
Consumer Confidence (ESRI - KBC)
20
40
60
80
100
120
Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
Source: ESRI - IIB, Thomson Datastream
Confidence Indicator
Expectations Component
Exports of Services (Volume Yr-on-Yr % Change)
-6
-3
0
3
6
9
12
15
18
Q1-04 Q3-04 Q1-05 Q3-05 Q1-06 Q3-06 Q1-07 Q3-07 Q1-08 Q3-08 Q1-09 Q3-09
Source : CSO
Retail Sales (Total and Core Sales, ex autos)(Y-on-Y % Change)
-30.0
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10Source: Thomson Datastream
Y-on-Y 3 Month Moving Average (Total Sales)
Total Sales
Core
Industrial Production Volume: 3 Mth Moving Average Y/Y %
-9
-6
-3
0
3
6
9
12
Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10Source: Thomson Datastream
15
Improving economic conditions this yearImproving economic conditions this year Exports to pick up on improving global
trade - BoP deficit to be largely eliminated
Household savings have risen to a high
level and could support spending
Easing in the pace of job losses given
downturn in construction well advanced
Unemployment to level off as
redundancies ease and emigration rises
Rising consumer & business confidence
Further decline in consumer prices
Irish HICP rate to remain well below UK &
eurozone levels
Sharply falling unit wage costs (-8% in
2009/10) helping competitiveness
Housing market begins to stabilise as
new supply falls to very low levels
Stabilisation of budget deficit
Irish Personal Savings Rate (%)
1
2
3
4
5
6
7
8
9
2001 2002 2003 2004 2005 2006 2007 2008 (e) 2009 (f) 2010 (f) 2011 (f)
Source: CSO, AIB ERU
Irish and Eurozone Inflation (HICP Rates)
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
Irish HICP
Eurozone HICP
Source: Thomson Datastream
16
Irish bond spreads narrow as public finances Irish bond spreads narrow as public finances stabilisestabilise
Tough government decisions stabilise the budget deficit – big spending cuts and tax hikes
Deficit of 11.7% of GDP in 2010, falling to 3% by 2014 as economy recovers
Ireland still has one of lowest debt ratios in EU: 51% at end 2009 - allowing for cash balances
Authorities running large cash balances: €27 billion at end Q1- compares to €18.7bn budget deficit target for 2010
Over €10bn of the €20bn 2010 government bond funding programme done in Q1
Very little gov. debt maturing until late 2011
Low public debt gives the State the capacity to support the banking sector
€7 billion recapitalisation of AIB/BOI in 2009 came from National Pension Reserve Fund
NAMA taking property loans off banks
Sovereign Irish CDS and government bond spreads have narrowed sharply in past year
Gen Gov Debt (% GDP 2009)
0
20
40
60
80
100
120
FIN IRE SPN NL UK AT GER FR PT EU 16 BEL GR IT
Source : Eurostat ; AIB ERU
Irish 5 Yr Credit Default Swap
50
100
150
200
250
300
350
400
05-Jan 05-Mar 05-May 05-Jul 05-Sep 05-Nov 05-Jan 05-Mar
bps
Source; Thomson Datastream
17
Irish data & forecasts (2006-2011)Irish data & forecasts (2006-2011)
2006 2007 2008 2009 2010 (f) 2011 (f)
Real GDP 5.4 6.0 -3.0 -7.1 -2.0 2.5
Real GNP 6.3 4.4 -2.8 -11.3 -2.7 2.0
Consumer Spending 6.6 5.9 -1.0 -7.2 -3.0 2.0
Government Spending 5.8 6.9 2.6 -1.3 -3.0 -0.5
Fixed Investment 4.0 2.3 -15.5 -29.7 -24.0 -2.0
Of which: New Housing +2.8 -11.7 -34.2 -50.0 -62.0 -20.0
Exports 5.1 8.6 -1.0 -2.3 2.0 4.0
Imports 6.5 5.6 -2.1 -9.3 -1.5 2.5
CPI Inflation (%) 4.0 4.9 4.1 -4.5 -0.6 2.0
HICP Inflation (%) 2.7 2.8 3.1 -1.7 -1.0 1.0
Budget Deficit (% GDP) 3.0 +0.3 -7.2 -14.3 -11.7 -10.4
Employment Growth (%) 4.4 3.6 -1.1 -8.2 -4.2 0.0
Unemployment Rate (%) 4.4 4.6 6.3 11.8 13.6 13.6
Source: CSO, AIB ERU Forecasts
18
Stronger performance from 2012Stronger performance from 2012 Open economy will continue to benefit
from globalisation, FDI
Large price and wage falls are helping economy to regain competitiveness
Exports to benefit from global recovery
Ireland has youngest population in EU
Housing output will need to rise from extremely low 2010/11 levels
Public infrastructure still at active stage of development
Scope for rebound in depressed consumer spending and business investment
Return to positive GDP from 2011
ESRI says Irish growth rates of 5.5% likely in medium term
AIB sees growth in 4-5% range from 2012
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
0-14 15-24 25-44 45-54 55-64 65+
1996 Census 2002 Census 2006 Census
Ireland Population Age Estimates
(Volume %) 2011 2012 2013 2014 2015
GDP 2.5 4.0 4.7 5.2 4.7
GNP 2.0 3.5 4.3 4.8 4.3
Consumer Expd 2.0 2.5 3.0 3.0 3.0
Government Expd -0.5 0.0 0.0 1.0 2.0
Fixed Investment -3.0 9.0 13.0 13.0 7.5
Exports 4.0 5.0 5.5 6.0 5.5
Imports 2.5 4.2 5.0 5.3 4.7
AIB ERU Medium Term Growth Forecasts
Source: CSO
19
Asset Covered Securities - Ireland Asset Covered Securities - Ireland
Overview of legal framework
20
Overview of ACS Framework - 1 Overview of ACS Framework - 1 Irish covered bonds, known as Asset Covered Securities or ACS, are issued under a legal framework, the ACS Act
2001, amended in 2007. Asset Covered Securities can only be issued by a specialist bank – “Designated Mortgage Credit Institution” (DMCI) The Financial Regulator licenses DMCI’s only if the applicant -
is owned by a regulated bank is a separately capitalised standalone bank has non-executive board membership provides a detailed account of the business appoints a Cover Asset Monitor
Cover Asset Monitor (CAM)
Appointed with the approval of the Financial Regulator.
Monitors on-going compliance with the ACS Acts.
Pre-approve all additions/removals to and from the pool.
Reports to the Financial Regulator.
Regulatory Notices under the ACS Acts are issued by the Financial Regulator – provide detailed rules
21
Overview of ACS Framework - 2Overview of ACS Framework - 2 Over-collateralisation:
ACS Act stipulates 3% minimum, Prospectus commitment is 5%
Loans valued at lower of loan balance and 75% of indexed property valuation (Prudent Market Value)
Substitution asset (cash) limited to 15% of bonds in issue
ALM rules restrict miss-matching:
Duration – weighted average duration of Assets must exceed duration of Securities
Interest – due from mortgage assets must exceed payments on bonds over any given 12 month period
Interest rate risk – NPV changes from 1% shifts in the yield curve must not exceed 10% of DMCI’s total own funds
Currency – Securities and Assets in Euro only, thus no FX risk
ACS bonds awarded RWA @ 10% (CRD and UCITS compliant)
Government Agency, NTMA, will perform role of Manager in event of parent’s insolvency
Irish issuers group – ACS Ireland – website - http://www.ibf.ie/acsireland.asp
22
AlB Mortgage Bank AlB Mortgage Bank
Description
Position in the Irish Mortgage Market
Distribution & Sanction
Mortgage Pool / Eligibility
Collateral Usage & Over-Collateralisation
Property Valuations
Pool Arrears
Ratings
23
AlB Mortgage Bank - Description AlB Mortgage Bank - Description
Bank License & Designated Mortgage Credit Institution (DMCI) status under ACS granted by Regulator – Feb ‘06
Public Unlimited Company, wholly owned by AIB plc*. Shareholders investment €920m, of which Tier (i) €620m Tier (ii) €300m
AIBMB’s assets - €21bn residential mortgage loans originated by AIB (ROI) – no commercial property mortgages or other business undertaken
Subject to prudential supervision by Financial Regulator as a bank and as a DMCI
Group Head of Finance chairs Board, supported by 8 Directors, including 3 non-executive directors
Origination and Servicing of loans outsourced to AIB (ROI) Division, via Outsourcing & Agency agreement
* In the event of failure, AIB plc is legally required to make good any deficit of AIBMB
24
AlB Mortgage Bank - Position in the Irish Mortgage Market AlB Mortgage Bank - Position in the Irish Mortgage Market
The Irish market is dominated by amortising floating rate loans, Ireland has had very limited supply of ‘sub-prime’
style products, where AIBMB /AIB does not participate
Total Irish mortgage market drawn balances as at December 2009 were €147bn
AIB’s drawn balances represents an 18.45%* market share with primary focus on AIB’s customers
AIB has a presence in all major towns and cities via a network of 271 offices:
• 36% of the banked public have a primary account relationship with AIB• 80%+ of Mortgage Bank book is sourced from existing AIB account holders
* Includes broker originated loans not included in AIB Mortgage Bank
25
AlB Mortgage Bank – Origination, Sanction, Services AlB Mortgage Bank – Origination, Sanction, Services
Mortgage origination through AIB’s extensive branch network with no sanctioning authority
Credit sanctioning undertaken centrally by dedicated team, with no sales targets or incentives
Mortgage processing and servicing undertaken by separate dedicated Home Mortgage Operations team (135 staff)
Impaired loans are passed to separate collection team under the Chief Credit Officer
Priority drivers to loan approval and grading- Repayment capacity is stressed, it is the key component, includes consideration of other financial
commitments- Income determination and confirmation via third party documents- Verification & sustainability of income is assessed- Determination of source of customer’s equity input - savings record, gifts from family, other assets held- Review Customer’s Credit History (Internal & External) - Internal Credit Grading - Behaviour Score -
Account Performance - External Credit Bureau - Track Record - Connected Accounts- Debt Service Ratio & LTV calculation made- All outside policy decisions are referred to senior lenders and reported to main Board on monthly basis
Once drawn, a loan is subjected to an automatic monthly credit grading process.
26
AlB Mortgage Bank – Mortgage Pool (i) AlB Mortgage Bank – Mortgage Pool (i)
Selection of assets for inclusion in the Cover Asset Pool Committed to maintaining a high quality Cover Asset Pool
Selection depends on the eligibility of assets
Ineligible assets include:
- Loans which are in arrears for more than 1 month* or loans which are impaired (self-commitment)
- Properties under construction (legal requirement)
- Loans which have an unindexed LTV > 100% (self-commitment)
* The legal requirement in relation to arrears is that loans in arrears > 90 days are not permitted to be added to the Cover Asset Pool.
Current total arrears (all 0-30 days) in pool at March 2010 is 0.9%.
Historical Quarterly Data Sheets, Mar 08 to Mar 10, provided on website-
http://www.aib.ie/servlet/ContentServer?pagename=AIB_Investor_Relations/Miscellaneous/
ir_article_printer&c=AIB_Article&cid=1256219261409&channel=IRHP
27
AlB Mortgage Bank - Collateral Usage AlB Mortgage Bank - Collateral Usage
at end March 2010
Usage of Mortgage Assets as collateral
Cover Asset Pool €16.2bn
Central Bank Mortgage Backed Promissory Note Pool €1.9bn
Total collateral in use €18.1bn
Other loans €2.8bn
Total mortgage assets €20.9bn
Bonds Issued
Benchmarks (2) €2.7bn
Registered Private €0.1bn
Internal Contingent Liquidity €11.2bn*
* available to repo with market or with ECB
Total Bonds Issued €14.0bn
Covered Bond Over-CollateralisationNominal Balances Under ACS Act
Mortgage Loans €16.2bn €14.0bn
Substitution Asset (Cash) €3.3bn €2.1bn
Total Cover Pool €19.5bn €16.1bn
Bonds in Issue €14.0bn €14.0bn
Over – Collateralisation 39% 15%
28
AIB Mortgage Bank – Property ValuationsAIB Mortgage Bank – Property Valuations
Property Valuations are:
Indexed to date on the quarterly publication of the ESRI/PTSB index
Index shows peak (Feb’07) to trough (Dec ’09) fall of 29.1% for non-Dublin and 35% for Dublin
Index is now at similar level to March 2003
Index considered to understate both the rise in valuations to 2007 and the subsequent fall
ACS Act provides protection for bond holders against falling property valuations
The Prudent Market Value (PMV) rule reduces the loan amount recognised as collateral for loans
with LTV over 75%
The PMV of a loan is the lower of the loan amount and 75% of the indexed valuation of the
property
The PMV of the loan is used in assessing ACS Act over-collateralisation requirements
29
AlB Mortgage Bank - Pool Arrears AlB Mortgage Bank - Pool Arrears
Arrears Profile > 30 days
Arrears > 30 Days
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10
Covered Bond Pool
AIB Mortgage Bank
30
AlB Mortgage Bank – Ratings AlB Mortgage Bank – Ratings Moody’s Covered Bonds Rating - AAA
• Over-Collateralisation – necessary to maintain current rating = 13.5% (1).
– Actual = 24% at March 2010 (1).
• Rating Criteria largely unchanged• Allied Irish Banks, p.l.c. long term rating A1, short term rating P-1
S&P Covered Bonds Rating – AAA Credit Watch Negative• Over-Collateralisation – necessary to maintain current rating = (under review)
– Actual = 39% (2). at March 2010• New Rating Criteria introduced 16th December 2009• Remedial action (re counterparties- substitution asset (cash) and interest rate swaps) being taken following downgrade of
Allied Irish Banks, p.l.c. to long term A- and short term A-2• Credit watch negative rating to be resolved for all S&P programmes by 16 th June
Fitch Covered Bonds Rating - AAA• Over-Collateralisation – necessary to maintain current rating = 27.9% (2).
– Actual 39% (2) at March 2010• Rating Criteria largely unchanged• Allied Irish Banks, p.l.c. long term rating A-, short term rating F1
(1)Based on Prudent Market Value of Mortgage loans(2)Based on Ledger Balance of Mortgage loans
AIB Global Treasury - 00-353-164-17803Bond Issue Desk
[email protected]@aib.ie
Treasury Economics - [email protected]
Websitehttp://www.aib.ie/servlet/ContentServer?pagename=AIB_Investor_Relations/IR_Homepage&channel=IRHP