The financial magazine International Financial Review (IFR) presented BBVA the award for the Best European Bond of 2023 for the contingent convertible (CoCo) bond issued in June of last year - the first of this kind following the collapse of Credit Suisse. The publication underscored that the step taken by BBVA was ‘crucial’ to recovering confidence in this debt market.
The collapse of Credit Suisse, which culminated in its acquisition by UBS, led to the close of the European CoCo market for months. The decision by Swiss supervisors to prioritize Credit Suisse shareholders over the bank’s CoCo bond holders - subverting the order when it comes to assuming losses - caused a lack of confidence in the debt market and abrupt declines in the value of CoCo bonds issued by European banks.
The CoCo market was thus closed, awaiting a bank that dared to step up and launch a bond issue again. In June 2023, BBVA reopened the CoCo market with a €1 billion issue. Demand tripled this amount. Investor appetite made it possible to set a very competitive price, slightly higher than what investors had paid for similar issues prior to the fall of Credit Suisse. The operation was carried out by the BBVA Group’s financial area.
“With so much at stake, the first movers would carry the hopes of the entire banking sectors on their shoulders” said IFR. “BBVA - the first bank in the European Union to issue CoCo bonds - stepped up as a leader once again.” This is the reason that the financial magazine recognized BBVA with the award for the Best European Bond of 2023.
“BBVA’s reopener would prove to be a crucial step on the market’s path to recovery, leading to a procession of CoCo issues, including UBS’s return in November, which cumulatively affirmed the product’s viability and importance,” the magazine added.
BBVA also won the award for the best financial bond in 2013 for being the first European bank to launch a contingent convertible bond.
IFR is a magazine specializing in capital markets, celebrating its 50th anniversary this year. The publication’s awards serve as a benchmark in the financial industry.