BBVA Issues $8.25% 'CoCo' Bond in Dollars to Boost Capital
MADRID, Spain - Following the holiday season, BBVA has returned to the debt markets with a contingent convertible bond, or 'CoCo', denominated in dollars and offering a yield of 8.25%. This financial instrument qualifies as Tier 1 capital, a key component of a bank's core capital. The move is seen as a strategic step by BBVA to strengthen its capital position and meet regulatory requirements. With this bond issuance, BBVA aims to diversify its funding sources and capitalize on favorable market conditions. The 'CoCo' bond market has gained popularity in recent years as a means for banks to raise capital while maintaining flexibility. This type of bond is designed to convert into equity if the bank's capital levels fall below a certain threshold, thereby providing an added layer of security for investors. As a leading financial institution, BBVA's decision to issue a 'CoCo' bond underscores its commitment to financial stability and prudence. By leveraging the debt markets, BBVA is poised to enhance its financial resilience and support its long-term growth strategy. Key terms associated with this financial product include contingent convertible bonds, Tier 1 capital, and bank debt markets.
