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Debt issuance Act. 26 Sep 2018

BBVA issues 'CoCo' bonds at 5.875%, the best price by a Spanish issuer

Photograph of Coco

BBVA’s has issued perpetual debt eventually convertible into shares at the cheapest price of all operations launched by Spanish issuers for this type of product. The issuing of €500 million of contingent convertible bonds, or ‘CoCos’ (also known as AT1) took place at a very attractive price, with a coupon of 5.875%.

BBVA took advantage of investor appetite for this type of product and the favorable conditions currently in the market, placing this bond issue at an all-time low for this type of product by an issuer in southern Europe.

This issuing will increase the bank’s Additional Tier 1 capital ratio by 13 basis points according to current European regulations (CRD-IV), under both the fully-loaded and phased-in criteria.

This instrument is perpetual, with a discretionary, non-cumulative coupon, loss-absorption through conversion into shares in the event of solvency incidents, and the possibility of early redemption at the option of the issuer in the fifth year.

It was a private placement bond issue, offered exclusively to qualified investors not living in Spain.

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