The AT1 issuance strengthens BBVA's capital base but introduces ongoing distribution costs. Monitor BBVA's CET1 ratio and any regulatory changes affecting AT1 eligibility. The 7.125% coupon is attractive for yield-seeking investors, but the discretionary nature of distributions and bail-in risk warrant caution.
Price Chart
Executive Summary
BBVA is issuing $1 billion in Series 16 perpetual non-cumulative contingent convertible preferred securities (AT1 CoCo). The securities carry a 7.125% initial distribution rate, resettable after 2033, and are mandatorily convertible into common shares if the CET1 ratio falls below 5.125%. Net proceeds of ~$991 million will be used for general corporate purposes, bolstering the bank's Tier 1 capital. BBVA's strong Q1 2026 earnings (profit up 10.8% YoY) and robust CET1 ratio of 12.83% support the offering's timing.
Key Facts
- BBVA is offering $1,000,000,000 in Series 16 non-step-up non-cumulative contingent convertible perpetual preferred tier 1 securities (AT1 CoCos).
- Initial distribution rate of 7.125% per annum until May 8, 2033, then resets to 5-year UST plus 2.985% margin.
- Mandatory conversion to common shares if CET1 ratio falls below 5.125% (Trigger Event).
- Distributions are discretionary, non-cumulative, and cancellable at any time.
- Net proceeds to BBVA are approximately $991,260,731 after underwriting discounts and expenses.
- Proceeds will be used for general corporate purposes, strengthening Tier 1 capital.
- BBVA's Q1 2026 profit attributable to parent was €2,989 million, up 10.8% YoY.
- CET1 ratio as of March 31, 2026 was 12.83% (well above the 5.125% trigger).
Financial Impact
The offering raises $1 billion in AT1 capital; net proceeds of ~$991 million will be used for general corporate purposes. No material impact on earnings currently, but the 7.125% distribution will increase fixed charges.
Risk Factors
- Distributions are discretionary and may be cancelled, reducing income.
- Mandatory conversion to common shares if CET1 ratio falls below 5.125% (unlikely given current 12.83%).
- Subject to Spanish bail-in power, which could write down or convert the securities.
- Perpetual maturity means no fixed repayment date; redemption depends on BBVA's option.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 424B5 Filing (Primary) | 0001193125-26-203509 |
| Document: d379377dexfilingfees.htm | 0001193125-26-203509 |
| Document: 0001193125-26-203509-index-headers.html | 0001193125-26-203509 |
| Document: 0001193125-26-203509-index.html | 0001193125-26-203509 |
| Document: 0001193125-26-203509.txt | 0001193125-26-203509 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Jun 9, 2026 19w ago | 6-K | $22.53 $29.53 | ▲ +31.07% | ▲ +26.99% | $25.17 (+11.72%) |
Jun 8, 2026 20w ago | 6-K | $22.47 $28.80 | ▲ +28.17% | ▲ +24.85% | $25.17 (+12.02%) |
Jun 1, 2026 21w ago | 6-K | $23.34 $29.58 | ▲ +26.74% | ▲ +25.50% | $25.17 (+7.84%) |
May 26, 2026 21w ago | 6-K | $22.40 $28.77 | ▲ +28.44% | ▲ +25.71% | $25.17 (+12.37%) |
May 18, 2026 23w ago | 6-K | $22.55 $28.42 | ▲ +26.03% | ▲ +21.18% | $25.17 (+11.62%) |
May 12, 2026 23w ago | 6-K | $21.20 $27.69 | ▲ +30.61% | ▲ +26.23% | $25.17 (+18.73%) |
May 11, 2026 24w ago | 6-K | $21.54 $28.83 | ▲ +33.84% | ▲ +29.45% | $25.17 (+16.85%) |
May 8, 2026 24w ago | 6-K | $23.00 $27.94 | ▲ +21.48% | ▲ +16.64% | $25.17 (+9.43%) |
May 8, 2026 24w ago | 6-K | $23.00 $27.94 | ▲ +21.48% | ▲ +16.64% | $25.17 (+9.43%) |
May 4, 2026 25w ago | 424B5 | $22.35 $25.89 | ▲ +15.84% | ▲ +13.98% | $25.17 (+12.62%) |
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