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BBVA Issues 5.5-Year Bonds Worth €1,250M

11 November 2015 – El Economista

Yesterday, BBVA completed the placement of mortgage bonds amounting to €1,250 million, with a five and a half year term, on which it will pay interest of 0.625%, the lowest coupon in the bank’s history for this kind of debt.

According to market sources, the strong demand from overseas investors allowed the bank to lower the price of the issue to 38 basis points above the midswap rate, the reference rate for this kind of issue.

The underwriting banks for the operation were BBVA itself, plus Commerzbank, Credit Agricole, HSBC and Natixis. The last time that BBVA carried out an operation of this kind was on 12 January 2015, when it also placed €1,250 million in mortgage bonds, although they had a 7-year term.

On that occasion, the entity paid interest of 0.75%, the lowest coupon on that kind of debt at that time, thanks to the fact that the operation attracted investors from all over the world, whose demand exceeded €2,500 million.

Following in the footsteps of CaixaBank

BBVA has launched this bond issue just one week after CaixaBank closed its own operation to issue 5-year mortgage bonds amounting to €1,000 million. Demand in that case almost doubled supply.

The price of that issue, which was closed on 4 November, amounted to 43 basis points above the midswap rate, and the bonds carry a coupon of 0.625%.

Original story: El Economista

Translation: Carmel Drake