Rating: A3/A/A-
Amount: €1bn of Covid-19 social paper
Maturity: 4 June, 2025
Issue/reoffer price: 99.488
Spread at reoffer: mid-swaps plus 112bp
Coupon: 0.75%
Launched: Wednesday, May 27
Payment date: June 4
Joint books: BBVA, Deutsche Bank, Natixis, Nomura, Société Générale, UniCredit
Borrower’s comments
This transaction is aimed to refinance the €1bn preferred senior notes issued in 2016 that entered into their last year maturity in Q1 2020, and so no longer contributed towards MREL. At issuance, 100% of the proceeds raised by the first public Covid-19 social bond will contribute to alleviate the severe social and economic impacts of the Covid-19 pandemic supporting small and medium-sized companies, and funding eligible projects in healthcare, education and affordable housing.
Geographic distribution
France 30%
Iberia 17%
UK and Ireland 13%
Germany and Austria 11%
Benelux 10%
Nordics 7%
Italy 5%
Asia and Middle East 3%
Switzerland 2%
Other 2%
Distribution by investor type
Fund managers 66%
Banks and private banks 18%
Insurance and pension funds 12%
Central banks and official institutions 3%
Hedge funds 1%
Market appraisal:
“…this is an interesting trade that other banks will look at for inspiration to follow. These bonds are used for specific purposes and they carry a very current purpose, so there is no reason for other issuers not to follow. It is surprising that BBVA was the first bank to issue a Covid-19 senior bond, but it certainly has enough assets to be able to launch this type of bond. I would have expected a French bank to open the market for these products. We are talking to issuers about Covid-19 bonds in senior format and they are becoming more comfortable with them, especially because conditions have been very conducive and that inspires confidence.”