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Portugal-based Banco BPI issues €275M in Additional Tier 1 bonds

Banco BPI SA will issue €275 million in undated, deeply subordinated Additional Tier 1 notes to controlling shareholder CaixaBank SA.

The bonds will carry an initial coupon of 6.50% up to the first call date. If the call option is unexercised, the coupon will reset by adding the 713.1 basis points spread at issuance to the prevailing five-year mid-swap for the next five years.

The bonds carry a temporary write-down feature, which would automatically be activated once the Portuguese bank's common equity Tier 1 ratio falls below 5.125%. Banco BPI added that the issue would increase its consolidated Tier 1 ratio and total capital ratio as of June-end by 1.6 percentage points.