MADRID - Banco Bilbao (NYSE:BBVA) Vizcaya Argentaria S.A. (BBVA (BME:BBVA)) has announced its intention to issue $1 billion in preferred securities that are contingently convertible into ordinary shares. This move is a continuation of the bank's strategy outlined in a previous announcement on September 26, 2024.
The issuance, which excludes pre-emptive subscription rights for existing shareholders, is expected to bolster BBVA's Additional Tier 1 Capital, in line with prevailing solvency regulations. The securities will initially carry a 7.75% annual distribution rate from January 14, 2025, to January 14, 2032. Subsequently, the rate will be reset based on a margin of 324.9 basis points above the 5-year U.S. Treasury rate.
BBVA has made it clear that the securities are not intended for retail investors, highlighting additional sales restrictions detailed in the terms and conditions of the issuance. The bank plans to list the securities on the New York Stock Exchange (NYSE), broadening its investor base and enhancing the liquidity of the securities.
In compliance with Spanish corporate law, BBVA will provide shareholders with access to the director's report and the independent expert's report on the issuance. These documents will be published on BBVA's website on the expected closing date of the issuance, January 14, 2025, and subsequently presented at the next General Shareholders' Meeting.
It is important to note that this issuance is subject to various jurisdictional restrictions, including but not limited to the United Kingdom (TADAWUL:4280), Spain, Singapore, Hong Kong, Canada, Switzerland, and the European Economic Area. BBVA has filed the necessary documentation with the U.S. Securities and Exchange Commission (SEC), including a registration statement and prospectus supplement, which are available for free on the SEC's website.
This financial maneuver is expected to enhance BBVA's capital structure and provide additional resources to support its strategic initiatives. The announcement is based on a press release statement and reflects the bank's ongoing efforts to maintain a robust capital position in a dynamic financial landscape.
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