CaixaBank SA will issue €1 billion in Additional Tier 1 capital.
The contingent convertible bonds will be issued at par and will carry an initial coupon of 6.75% for the first seven years. Thereafter, the coupon will reset to a spread of 649.8 basis points above the five-year euro midswap rate.
The bonds will be converted into newly issued ordinary shares in CaixaBank if the Spanish lender's common equity Tier 1 ratio falls below 5.125%. The conversion price would be the highest of the average of the daily volume-weighted average prices of a CaixaBank ordinary share on each of the five consecutive dealing days until the conversion date, the floor price of €2.803 or the nominal value of a CaixaBank ordinary share at the time of conversion.
The bank said its CET1 ratio stood at 11.9% on a phased-in basis and 11.5% on a fully loaded basis as of March 31, adding that the phased-in ratio would rise to 12.5% following the CoCo issue. Its phased-in and fully loaded Tier 1 ratios will each rise by 0.7 percentage point after the issuance, to 12.6% and 12.2%, respectively.