BBVA Prices $1 Billion Contingent Convertible Perpetual Preferred Tier 1 Securities Offering

summarizeSummary

Banco Bilbao Vizcaya Argentaria, S.A. priced a $1 billion offering of Series 16 Non-Step-Up Non-Cumulative Contingent Convertible Perpetual Preferred Tier 1 Securities, with an initial distribution rate of 7.125% per annum, to strengthen its regulatory capital.

check_boxKey Events

• Offering Details

  Banco Bilbao Vizcaya Argentaria, S.A. priced a $1 billion offering of Series 16 Non-Step-Up Non-Cumulative Contingent Convertible Perpetual Preferred Tier 1 Securities.

• Distribution Rate

  The securities will accrue distributions at an initial rate of 7.125% per annum, resetting every five years starting May 8, 2033.

• Mandatory Conversion

  The preferred securities are mandatorily convertible into common shares upon a Trigger Event (CET1 ratio below 5.125%) or a Capital Reduction.

• Bail-in Risk

  The securities are subject to the Spanish Bail-in Power, which could lead to a reduction or conversion of principal by regulatory authorities.

auto_awesomeAnalysis

This offering provides Banco Bilbao Vizcaya Argentaria, S.A. with $991.26 million in net proceeds for general corporate purposes, bolstering its Tier 1 capital. The securities are perpetual, non-cumulative, and feature a 7.125% initial distribution rate, resetting periodically. A key risk for investors is the mandatory conversion into common shares if the bank's CET1 ratio falls below 5.125%, or upon a capital reduction, which would be highly dilutive. Additionally, these securities are subject to the Spanish Bail-in Power, allowing regulatory authorities to reduce or convert the principal under distress. This capital raise occurs shortly after the bank reported strong Q1 2026 earnings and announced a new share buyback program, indicating a strategic move to manage its capital structure and regulatory requirements.