BBVA Launches 2025 AT1 Dollar Debt Issue for Debt Market Entry
BBVA kicked off the 2025 debt market by issuing a contingent convertible bond, commonly known as a CoCo or AT1 bond, in dollars. In doing so, BBVA became the first European bank to introduce a debt issue in this format in 2025. This move underscores BBVA’s commitment to diversifying its sources of financing.
The AT1 bond has a unique feature—an early redemption option in seven years—at a quarterly initial price of 8.25 percent. This venture aligns with BBVA’s overarching financing strategy for 2025, aiming to fortify its AT1 hybrid capital. The operation was shepherded by several bookrunners, including BBVA, Barclays, Bank of America, Citi, HSBC, and JP Morgan.
This issuance adheres to SEC format, with a prospectus registered with the U.S. Securities and Exchange Commission. By opting for this structure, BBVA can tap into a more extensive investor pool, encompassing investors in the U.S., Europe, and Asia. BBVA’s prior CoCo bond issuance in dollars dates back to September 2023.
What makes this issuance significant is that it signifies BBVA’s first debt issue in 2025—landing it the distinction of initiating a series of seven debt issuances this year alone. For instance, in August, BBVA issued €1 billion of subordinated Tier 2 debt. In May, it ventured into senior preferred debt in two tranches amounting to €1.75 billion. Not to mention the double senior preferred and non-preferred debt issuance in March, totaling $1 billion each. Going back to January 2024, BBVA engaged in a series of significant debt issuances, including a €1.25 billion subordinated Tier 2 debt issuance, a similar amount of senior preferred debt, and a senior preferred green bond worth €1 billion.
