Banco Bilbao Vizcaya Argentaria : BBVA places €1 billion of CoCo bonds with 5.875% coupon

Market reaction to the issue was very positive: the book reached €5 billion, with over 370 orders. For the first time, the format of the issue, registered with the CNMV, allowed Spanish institutional investors to take part for the first time.

BBVA has already met its Additional Tier 1 (AT1) Capital requirements (1.73 percent at end-June, above the required minimum of 1.50 percent) [1] but has taken advantage of investor appetite for this type of product and favorable market conditions. The issue also gives the bank greater flexibility to refinance existing issues and in this way, optimize its financing costs.

BBVA, Barclays, BNP Paribas, Bank of America Merrill Lynch, Citi and Credit Suisse were the bookrunners for the issue.

This is BBVA's seventh CoCo bond issue and the fifth in euros. In May 2013, it issued a €1.5 billion bond, with a coupon of 9 percent, which was called last May. In February 2014 and 2015, it launched two issues, both denominated in euros and for the same amount (€1.5 billion); in April 2016, it issued a €1 billion bond, with which it fully covered the cushion of 1.5 percent of Additional Tier 1 capital that the regulation allows to be computed with these issues; in May 2017, it entered the market with an issue of CoCos for $500 million, at the best price obtained by a Spanish issuer up to that time (a 5.875 percent coupon); and in November it issued a €1 billion coco bond with the longest maturity (10 years) and the lowest coupon in dollars for an issuer from southern Europe.