Banco de Sabadell SA transferred roughly €1 billion of consumer loans into a securitization vehicle called Sabadell Consumo 1 with an average interest rate of 7.4% and an average duration of roughly two years.
The transaction was more than 3x oversubscribed by institutional investors and will be completed once the asset-backed securities issued by the securitization fund have been subscribed and paid for.
The transaction is expected to generate a capital gain of €80 million before tax, with a total positive effect on the bank's common equity Tier 1 ratio of approximately 10 basis points on a fully loaded basis, assuming a 50% dividend payout accrued on the capital gain. Excluding such a dividend, the positive effect in Sabadell's fully loaded CET1 ratio would be roughly 14 basis points.
