Press Release

AIAF admits to trading a €1 billion Additional Tier 1 issue by Caixabank

First issue of this kind of securities in the Spanish Market

19 June, 2017

AIAF, BME's Fixed Income Market, has admitted to trading an issue of preferred securities eventually convertible into €1 billion-worth ordinary shares (Additional Tier 1 Preferred Securities) of CaixaBank.

These preferred securities are issued in accordance with Law 10/2014 on the management, supervision and solvency of credit institutions and are eligible as additional Tier 1 capital of the Bank.

The term of the issue is perpetual, although the securities may be amortised under certain circumstances at the discretion of CaixaBank, and, in any case, they could be converted into common shares if the ordinary Tier 1 capital ratio of Bank or of the Group to which it belongs was (CET1) lower than 5.125%.

The securities’ nominal value per unit is 200,000 euros and they will yield a mixed remuneration, that is, fixed and variable. During the first 7 years they will yield a fixed rate of 6.75% per annum and during each of the following five-year periods the remuneration will be the result of adding a margin of 6.498% to a rate fixed for each five-year period, based on a five-year benchmark for derivatives trades (the 5-year Mid-Swap Rate).

The issue is aimed at qualified investors and has been rated BB- by Standard & Poor's.

Barclays Bank and Société Générale CIB act as Structuring Advisors and Joint Lead Managers; CaixaBank, J.P. Morgan and Morgan Stanley act as Joint Lead Managers and Linklaters and Allen & Overy as legal advisors.

Julio Alcántara, General Manager of AIAF, said: "this is the first issue of this nature carried out by a financial institution in Spain, which demonstrates that the Spanish market can accommodate all types of assets, however sophisticated they may be ".

Preferred securities that may eventually be converted into shares, commonly known as AT1 or "CoCos" in the financial sector, are in fact completely different assets from the old preferred shares and are issued to strengthen the solvency ratios and the liquidity coverage ratio of a firm.   

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