Moody's updates its comments on the Irish government's guarantee for six financial institutions

Backed Short Term Issuer Rating of Prime-1 likely to be assigned to Irish Nationwide

London, 07 October 2008 -- Moody's is today updating its comments on the guarantee that has been put in place by the Irish government, covering deposits, senior debt, covered bonds and dated subordinated debt of six local institutions during a two year period that will end on 28 September 2010. The six institutions currently covered under the guarantee are Allied Irish Banks, Bank of Ireland, Anglo-Irish Bank, Irish Life & Permanent and EBS and Irish Nationwide Building Societies. Moody's notes that the Irish government has announced that other banks present in Ireland can apply to be covered under the guarantee, however we would expect this to be only extended to institutions with a sizeable retail presence in the country. Details of how the cost of the guarantee will be calculated are still to be released.

Following release of the final terms and conditions of the guarantee, assuming that Moody's gains sufficient clarification on the issue of timeliness of payment, a backed short-term issuer rating of Prime-1 is likely to be assigned to Irish Nationwide Building Society (INBS). This will reflect that short-term obligations of the institution maturing within the guarantee period are backed by a Prime-1 rated sovereign. To reflect the stand-alone credit profile of INBS and the exposure of creditors once the guarantee is withdrawn Moody's will maintain its short-term bank deposit and debt rating which currently is Prime-2, on review for possible downgrade.

As per Moody's previous comment, the rating agency views the guarantee as being potentially helpful as it should improve the ability of the six institutions to raise funding in the capital markets at a time when many financial institutions are suffering from a lack of market confidence. However given the two-year term of the guarantee, it is unlikely to have positive rating implications for the long-term ratings of the six institutions which already incorporate uplift from their respective bank financial strength ratings as a result of potential systemic support (two notches for Allied Irish Banks, Bank of Ireland, and Irish Life & Permanent and one notch for Anglo-Irish Bank, Irish Nationwide Building Society and EBS Building Society) from the Aaa local currency deposit rating of Ireland.

The institutions covered by the guarantee are as follows:

Allied Irish Banks plc -- rated Aa2/P-1/B- (Stable outlook)

Bank of Ireland -- rated Aa2/P-1/B- (Negative outlook)

Anglo-Irish Bank -- rated A1/P-1/C+ (Stable outlook)

Irish Life & Permanent -- rated Aa3/P-1/C+ (Negative outlook)

EBS Building Society -- rated A1/P-1/C+ (Stable outlook)

Irish Nationwide Building Society -- rated Baa1/P-2/C- (Review for possible downgrade)

London
Johannes Wassenberg
Managing Director
Financial Institutions Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

London
Ross Abercromby
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454