Business Context and Reporting Period
This Form 6-K filing by Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) is dated January 7, 2025. The report discloses a specific capital raising event rather than periodic financial results. BBVA is a Spanish multinational banking and financial services company.
Key Financial Metrics and Capital Structure
The filing details a new issuance of preferred securities with the following characteristics:
- Instrument Type: Preferred securities contingently convertible into newly issued ordinary shares.
- Total Nominal Amount: $1,000,000,000 USD.
- Capital Classification: Expected to qualify as Additional Tier 1 Capital upon full payment.
- Initial Distribution Rate: 7.75% per annum (fixed).
- Fixed Rate Period: From January 14, 2025, to January 14, 2032.
- Reset Mechanism: Post-2032, the rate will reset based on the 5-year UST plus a margin of 324.9 basis points.
- Payment Terms: Distributions are discretionary and subject to certain conditions.
- Listing Venue: New York Stock Exchange (NYSE).
The filing text does not provide clear values for revenue, profit, cash flow, operating margins, total debt, or liquidity ratios for the reporting period.
Material Changes
This filing represents a material change in BBVA's capital structure through the planned issuance of $1 billion in Additional Tier 1 capital. The issuance excludes pre-emptive subscription rights for existing shareholders. The transaction is not directed towards retail investors.
Outlook, Risks, and Contingencies
Management Commentary and Timeline:
- The issuance closing date is expected to be January 14, 2025.
- Director's reports and independent expert/auditor reports regarding the issuance will be published on BBVA's website on the closing date.
- These reports will be presented to the first General Shareholders' Meeting held after the issuance.
- Discretionary Distributions: Payment of distributions is not guaranteed and is subject to conditions.
- Contingent Conversion: Securities may convert into ordinary shares under specific conditions.
- Geographic Restrictions: The offering is restricted in various jurisdictions including the UK, Spain, Singapore, Hong Kong, Canada, Switzerland, and the EEA.
- Investor Suitability: The issuance is not directed at retail investors.
Key Facts for Investor Verification
- Verify the final terms of the $1 billion issuance in the prospectus supplement filed with the SEC.
- Confirm the exact closing date of the issuance (expected January 14, 2025).
- Review the specific conditions under which distributions may be cancelled or securities converted.
- Check the impact of this issuance on BBVA's total Additional Tier 1 capital ratio once closed.
- Ensure compliance with local regulations if considering investment, given the restrictions in multiple jurisdictions.