Reuters: Bankruptcy News: UPDATE 1-CaixaBank eyes Tier 2 market

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UPDATE 1-CaixaBank eyes Tier 2 market Oct 28th 2013, 11:32 Share this Email Print Reprints Mon Oct 28, 2013 7:32am EDT (Adds background) By Helene Durand LONDON, Oct 28 (IFR) - CaixaBank is set to test investor appetite for Spanish subordinated bank debt on Tuesday after it mandated Bank of America Merrill Lynch, Barclays, BNP Paribas, CaixaBank and Goldman Sachs for a new Tier 2 bond. CaixaBank will be able to bolster its total capital position and its balance sheet's loss-absorption capacity. Furthermore, out of a total of EUR4.15bn of Tier 2 securities outstanding, EUR600m are losing eligibility as capital instruments as they approach maturity. The lender is the first to emerge from the recent Spanish bank earnings season during which a series of Italian banks have taken advantage of the strong bid for higher-yielding peripheral bank bonds. Some EUR6bn of Italy bank debt across covered bond, senior and subordinated markets has priced. UniCredit issued a EUR1bn 12-year non-call seven-year Tier 2 at 410bp over mid-swaps last week that attracted over EUR3.5bn of demand and was the first subordinated deal with a callable structure from a peripheral bank since 2011. Like other Spanish banks, CaixaBank has seen improved pricing on its bond market forays during 2013, which have raised it EUR4bn in various formats. Earlier this month it priced a EUR1bn 3.5-year senior at 170bp over mid-swaps, compared to 245bp for a five-year earlier this year. That was the first senior Spanish issue in almost six months and attracted an order book just shy of EUR3bn. However, there have been capital deals by Spanish banks recently. Banco Popular Espanol sold a EUR500m perpetual non-call five-year Additional Tier 1 issue at the end of September that attracted books of over EUR1.5bn and carried a 11.5% coupon. CaixaBank is rated BBB-/BBB by S&P/Fitch at the senior level, with the new 10-non-call five year deal expected to be BB+/BBB-. (Reporting by Helene Durand, editing by Alex Chambers, Julian Baker) Link this Share this Digg this Email Reprints

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