Spain's BBVA to issue 1.5bn euros in contingent convertible bonds

MADRID: Spanish bank BBVA is to strengthen its capital base through issuing contingent convertible bonds worth 1.5 billion euros ($1.70 billion).

In a statement to the stock market regulator on Tuesday, BBVA said the issue would be offered only to foreign private banks and qualified investors.

The bank would ask the bonds, convertible to shares which would trade on the Irish stock exchange, to count as part of its Tier 1 capital ratio, BBVA said in a statement.

The European Central Bank has been advising banks to set aside more funds to bolster their capital, and to take into account more stringent requirements when deciding on dividend policy.

On Feb. 5, Spanish rival Popular priced a contingent convertible bond worth 750 million euros.