BBVA today placed an AT1 contingent convertible (CoCo) bond on the market, with a December 21, 2028 redemption window. The interest rate was set at 8.375 percent, significantly lower than the initial 8.75 percent. Demand reached €3.1 billion, tripling the initial offer of the issue.
This issue is part of the Group’s funding plan for this year. The bookrunners include Barclays, BBVA, Bank of America, Citi, Goldman Sachs and Natixis. It is the first CoCo issued by BBVA since July 2020.
As the first securities issue of this kind by a European bank since the Credit Suisse crisis in March 2023, BBVA’s CoCo bond provides flexibility to face the upcoming redemption options from previous AT1 issues, with September 24th of this year being the earliest.
This is the fifth debt issuance by BBVA in 2023. In January 2023, the bank issued €1 billion of senior non-preferred debt, with an eight year maturity, and an additional €1.5 billion covered bond issue with a 4.5 year term. In May, BBVA issued €1 billion of senior preferred debt with a three year maturity and in June, it placed €750 million of Tier 2 subordinated debt.