Shortly after midnight last Friday, Ann Nolan, deputy head of the Department of Finance, and two officials working on AIBs flotation hailed a taxi from the Dawson Street base of stockbrokers Davy in Dublin to the home of Paschal Donohoe.
The Finance Minister of just one week had been on standby in Phibsborough all evening, as department officials, investment bankers from Deutsche Bank, Bank of America Merrill Lynch and Davy, divvied out AIB shares to more than 230 international fund managers and 6,500 small investors who had sought access to Europes largest initial public offering (IPO) so far this year.
The Minister made us a cup of tea and we spent an hour with him, said Des Carville, head of the Department of Finances banking unit and official in charge of the flotation, who shared the taxi ride. He had plenty of questions and we walked him through where we were with the deal and the final list of investors.
Armed with Mr Donohoes approval and signature on various documents, the trio headed back to the deals nerve centre in Davy, to finalise paperwork, paving the way for AIB to return that morning to the main stock markets in Dublin and London after a 7-year absence.
It was after 2am before all assembled, including AIB chief executive Bernard Byrne and his chief financial officer Mark Bourke, who had flown in from London that evening, headed home. They wouldnt get much sleep.
Project Viking, two years in the planning, culminated at 7am that morning when the Government confirmed it had sold an initial 25 per cent stake in the most expensive surviving Irish bank to bail out during the crisis, raising 3 billion. As the shares rose by as much as 7.7 per cent in early trading in Dublin, the investment banks underwriting the deal exercised an option to buy a further 3.8 per cent stake from the State and placed it on the market, raising a further 400 million for the exchequer.
The bank that floated was a very different animal to the one that was seized by the State two days before Christmas in 2010 to avert its collapse under the weight of mounting bad debts.
To limit its taxpayer bailout to 20.8 billion between 2009 and 2011, AIB was forced to sell billions of euros of assets including its profitable Polish unit, Bank Zachodni WBK, and 24 per cent stake in US lender M&T Bank and inflict 5 billion of losses on holders of its riskiest, subordinated bonds.
As a ward of the State, the company slashed thousands of jobs and put as many as 2,000 staff into a loan-restructuring unit to work through and restructure a mountain of soured loans, which topped 29 billion in 2013, over a third of its entire loan book at the time.
The fruits of the efforts were apparent in early March, when the group reported its impaired loans had fallen to 9 billion, pre-tax profits came to 1.7 billion for 2016 and that it had sufficient capital in reserve to give regulators comfort for AIB to pay a 250 million dividend.
The market reaction to the full-year 2016 results were very important we assessed it very closely, said Mr Carville. The icing on the cake was getting the dividend. That was very material in terms of AIBs valuation and also [potential investors in] the bank. Suddenly the guys who really like to have income in their investments were very interested in this as well.
While the then minister for finance, Michael Noonan, stuck to a script that he saw two windows to float AIB this year in May/June or in the autumn officials working on the deal were emboldened enough by the London reception and general market conditions to start working towards a deal in early May.
British prime minister Theresa Mays move on April 18th to call a snap election on June 8th put paid to such plans. An announcement on a deal was notionally put back until the end of the month, meaning it would price towards the end of June, leaving investors plenty of time to digest the UK vote.
But no one had counted on a second UK surprise, when it became clear in the early hours of June 9th that Theresa May had failed to return an expected landslide victory and now found herself short of a parliamentary majority 10 days before crucial Brexit talks were due to start.
As markets absorbed the shock outcome, AIBs chief executive, Mark Bourke popped out of his office at the banks headquarters in Ballsbridge in Dublin at 8am to meet Des Carville in a nearby coffee shop. Matters were out of their control at this stage, so they decided to keep a watching a brief on European markets.
At mid-morning, bankers from Deutsche Bank, Bank of America Merrill Lynch and Davy, who were leading the 3 billion share sale, as well as the Department of Finances independent advisers, Rothschild, gathered in Dublin for a pre-scheduled meeting on how the deal was going down.
While feedback from the nine firms working on the deal, including Citigroup, Goldman Sachs, Goodbody, JP Morgan, UBS and Investec and whose analysts had carried out 1,500 meetings with potential investors in less than two weeks, was upbeat, the UK result had thrown a spanner in the works.
By the time the markets had closed on Monday, advisers on the deal felt that issuance of the price range and prospectus could actually be brought forward. Michael Noonan made the call that evening to proceed immediately, setting an initial price range for the shares being sold at between 3.90 and 4.90 each. It would be his last major decision as finance minister, capping six years in office.
At AIB Bankcentre in Ballsbridge, a team in a fourth-floor room in the investor relations department where a wall carried four clocks displaying times in Dublin, Los Angeles, New York and Hong Kong kicked into action, mobilising three teams to market the bank globally.
Robert Mulhall, head of AIBs Irish retail and commercial banking division, was already on the west coast of the US, having attended a Google executive conference in Silicon Valley that weekend, according to sources. Group director of finance and investor relations Myles OGrady flew out to meet him on the Tuesday and begin that leg of the roadshow.
In Dublin, Bernard Byrne, Mark Bourke and investor relations managers Niamh Hore and Rose ODonovan kicked off in Dublin meeting fund managers before heading to London, where they were joined by group chief operating officer Tomas OMidheach.
Meanwhile, group treasurer Donal Galvin, chief economist Oliver Mangan and Janet McConkey of investor relations flew to Singapore to begin the courting of Asian investors before returning to Europe, where they met up with Colin Hunt, head of wholesale and institutional banking.
Within 24 hours of the initial pricing range being set, the investment banks decided to prod potential investors by putting out a notification that they had received enough orders to cover all the shares being sold.
On June 21st, Paschal Donohoe signed off on a narrowing of the price range to between 4.30 and 4.50, and the following morning he allowed managers of the transaction to send out a warning an hour before the order books closed at noon that any bids below 4.40 risked being cut out of the deal.
With the price of the transaction set at 4.40, the three main firms managing the process assembled at Davy at 5pm on June 22nd with Department of Finance officials, including Scott Rankin, Joseph Cummins, Ronan Heavey, Gary Hynds and Elaine McNamara and AIBs Bernard Byrne to go through the allocation of shares to investors.
Some 6,500 small investors would receive 10 per cent of the shares on offer. About 30 per cent of the institutional investors who sought to get on board were refused any shares as they hadnt met analysts or management during the process.
Wed never heard of them. The majority of them, if not all of them, were just momentum traders, who would sell immediately if the stock went up, said Mr Carville. It would have been close to midnight before the allocations were completed.
US investors snapped up a quarter of the shares being sold, with UK-based institutions accounting for a third, with the remainder handed out to investors across Europe and the rest of the world.
The reception in continental Europe wasnt quite as good as elsewhere, said an investment banking source close to the deal. There still is a bit of scepticism in Europe about Irish banks and, indeed, the banking sector in general.
While non-performing loans have come down sharply across Irish banks over the past four years, as the economy rebounded from the crash and lenders restructured problem loans at pace, almost 16 per cent of loans across the sector remain impaired, according to Government figures. Thats three times the European average.
Still, AIB shares jumped 4.5 per cent on the opening of trade in Dublin at 8am last Friday, to 4.60, before rising as much as 7.7 per cent.
Im absolutely satisfied that the 4.40 price was right, said Des Carville, a former corporate financier with Davy, who was hired by the department in 2013 to head the management of the States stakes in bailed-out banks. We lost quite a number of investors at that price, as it was just too expensive for them. Thats the acid test. But, importantly, we also kept equally high-quality investors at that level. But once you went above 4.40, the quality fell off a cliff. Mr Carvilles first congratulatory text of the day came within minutes of trading getting under way, from Richie Boucher, the outgoing chief executive of Bank of Ireland, in which taxpayers continue to own a 14 per cent stake.
He was followed shortly by Jeremy Masding, chief executive of Permanent TSB, which is 75 per cent State owned.
After that, it was around to Doheny & Nesbitts on Baggot Street for 18 members of the departments banking team for a quick celebratory breakfast.
Mr Byrne sent a short video message by email to AIBs 10,400 staff less than half the banks workforce before the crash shortly after 7am.
This marks a really satisfactory conclusion to what has been a long, difficult and complicated process, he said. Everyone should be very proud of what this investment means.
Now we are in a position where the bank that weve been building, the bank that weve asked everyone to believe in is clearly one that investors believe they can invest in.
Before the IPO, AIB had repaid only 3.3 billion of capital pumped into the bank. However, the State had also recouped an additional 3.5 billion in cash from AIB, the most costly bank rescue behind Anglo Irish Bank, by way of interest payments on bailout bonds and guarantee fees.
Mr Donohoe told journalists last week that he was confident the State would recover all of the money injected into the bank, over time. Still, by Michael Noonans previous admission, it could take up to a decade before taxpayers are fully rid of AIB shares.
Meanwhile, Nolan, a key figure on the States bailout and restructuring of the banking sector during the crisis, signalled yesterday she plans to retire at the end of next month
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Inside Project Viking: Anatomy of deal to float AIB - Irish Times