BME today admitted to trading a Convertible Contingent (CoCo) bond issue from CaixaBank for 750 million euros. It is a perpetual debt issue with a first call date set in April 2028. The issue will have a fixed coupon until 2028 and from there onwards a variable rate linked to the 5-year Mid-Swap. Due to the strong oversubscription during the placement - higher than 4.1 billion euros - the initial interest rate has been lowered to 5.875%. This issue, which qualifies as additional Tier 1 capital (AT1), will allow the entity to strengthen its capital structure and increase the top-quality capital buffer.
CoCos are hybrid instruments that have both debt (they pay a periodic interest to the buyer) and equity (they can absorb losses) elements and are convertible into the issuer’s shares if the highest quality capital ratio falls below a certain level.
To carry out the placement, CaixaBank has appointed Barclays Bank as Sole Structuring Advisor and Lead Manager, and Bank of America Securites Europe, CaixaBank, Morgan Stanley and Société Générale Corporate & Investment Banking as Joint Lead Managers.
Linklaters has advised the issuer and Allen & Overy the Joint Lead Managers in relation to Spanish and English legislation.
CaixaBank has a Baa1 rating, stable outlook, granted by Moody’s; BBB +, stable outlook, by S&P, and BBB +, negative outlook, by Fitch.
Gonzalo Gómez Retuerto, General Manager of BME Renta Fija, highlights that the significant oversubscription registered in the placement "shows that the fixed income market continues receiving very high levels of interest from investors."
This is the third anti-crisis debt transaction registered with BME's AIAF market so far this year, following the one carried out in January by Ibercaja, for 500 million euros, and BBVA's green CoCo issue in July, for 1 billion. The total outstanding balance of the 32 issues that qualify as regulatory capital currently in circulation in this market exceeds 11.6 billion euros.