9 March 2016 – Cinco Días
On Tuesday, BBVA launched a 7-year mortgage bond issue, amounting to €1,250 million, at a price of 52 basis points above the mid swap rate, the reference rate for this kind of placement.
The operation was well received, with demand amounting to €2,700 million, according to market sources. That drove down the price from 60 basis points first thing, to the aforementioned spread of 52 basis points above the reference rate. The figure represents the cheapest price at which any Spanish bank has placed debt so far this year.
By geography, 41% of the debt was placed with German and Austrian investors; 18% was placed with Spanish investors; 10% with Norwegian investors; 9% with investors from France and the Benelux countries (Belgium, the Netherlands and Luxembourg) and 8% with Italian investors.
In addition, another 4% of the debt was placed with investors in Europe; another 3% in the UK and Ireland; and another 2% in Switzerland. By type of investor, the main buyers were central banks and official bodies (37%); followed by fund managers (27%); insurance companies and pension funds (18%) and banks (17%).
The banks that acted as the underwriters of this debt issue were BBVA itself, as well as Citigroup, Crédit Agricole, Lloyds Bank and Sociètè Gènèrale.
BBVA already issued €1,000 million in 5-year mortgage bonds during the first few days of the year. This type of issue has been very popular in recent times. Also in January, Bankia issued €1,000 million in 5-year bonds; Santander placed €1,000 million in 10-year bonds; and the Spanish subsidiary of Deutsche Bank issued €500 million in 7-year bonds.
Original story: Cinco Días
Translation: Carmel Drake