Kutxabank places 500 million non-preferred senior debt at five years By EFE

(Update the EC3262 with more data)

Bilbao / Madrid, Sep 18 (.) .- Kutxabank has closed a non-preferred senior debt issue worth 500 million euros with a five-year repayment term, the Basque bank reported Wednesday.

The yield of the bonds has been established at 100 basis points on mid-swap, reference used in these issues

In addition to strong domestic demand, the issue has been subscribed by international institutional investors from countries such as the United Kingdom, France and Germany, among others.

For Kutxabank, its high level of acceptance is reflected in that the demand has greatly exceeded the amount of the operation and that its placement margin has been below other similar issues recently made.

The issue has been valued by the international agencies Moodys, S&P and Fitch with a rating of low approved (-respectively) and high approved (BBB +), investment grade, which place it among the best in the sector for this type of instruments.

BBVA banks (MC :), Santander (MC :), Barclays (LON :), Crédit Agricole (PA 🙂 CIB and Natixis (PA 🙂 have been the placers in this operation, which has been co-directed by Norbolsa.

This is an issue linked to the MREL requirement, the new regulatory requirement established by the JUR (Single Resolution Board); Kutxabank has one of the least demanding MREL requirements of the Spanish financial system.

The MREL implies that it must reach, as of July 1, 2021, a volume of own funds and eligible liabilities corresponding to 10.5% of the total liabilities and own funds that it had on the date of calculation, fixed on 31 December 2017. The requirement would be equivalent to 19.5% in terms of risk-weighted assets.

According to this analysis, the Kutxabank group should issue an approximate amount of 1,100 million euros of eligible emissions for compliance purposes, a volume of emission that the entity considers "very acceptable." The issuance of senior non-preferred debt completed today is the first step in meeting that requirement.

Given its strong liquidity position, Kutxabank has not resorted to issues in financial markets since 2015, when it issued the so-called "social covered" bonds, destined for socially responsible projects.

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