The new risky BBVA bond offers interest of 8.375 percent per year.
(Photo: IMAGO/Zoonar)
Frankfurt The shock quickly subsided: almost three months after Credit Suisse surprisingly let the owners of subordinated AT1 bonds go completely empty-handed, the market has recovered again. Risky bond prices have risen again and two banks, BBVA and Bank of Cyprus, have raised fresh money through the special bonds. The strategists at Bankhaus Metzler even speak of a “resurrection” of the AT1 market.
BBVA equipped its EUR 1 billion AT1 bond with an interest coupon of 8.375 percent and received purchase orders for EUR 3 billion. The Cypriot credit institution Bank of Cyprus, which has a weaker credit rating, even offers 11.875 percent interest.
The bond was small at EUR 220 million, but was oversubscribed more than tenfold. Both bonds have an indefinite term, but can be repaid after five years at the earliest.
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