BBVA Places EUR 1 Billion Contingent Convertible Bond Issue

✦ Meridian Analysis

BBVA has signed a EUR 1 billion contingent convertible (CoCo or AT1) bond placement, designed to bolster its regulatory capital base and advance part of the financing programme slated for 2027. The perpetual instrument carries a fixed coupon of 6.5% after strong investor demand—applications totalled EUR 8.25 billion, more than eight times the amount placed. An amortisation window opens on 18 October 2034, giving BBVA the option to redeem the bonds; if the option is not exercised, the coupon will switch to a variable rate linked to the five‑year mid‑swap plus a spread. The transaction was executed by a syndicate comprising Barclays, Bank of America, Citi, Deutsche Bank and Natixis. Meridian reported earlier this month that BBVA sold €1 billion of AT1 CoCos at the same 6.5% rate to pre‑fund its 2027 plan. Deal professionals will watch for the exact redemption timetable and any optionality exercised in 2034, as well as the composition of the investor base, which the prospectus did not disclose. Information on any ancillary covenants, the final pricing spread over the reference rate after the coupon switch, and regulatory clearances remains unavailable, leaving the full cost and flexibility of the capital raise to be confirmed in subsequent filings.

The Meridian Weekly