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By Aimee Donnellan
LONDON, May 13 (IFR) - Bailed-out Spanish lender Bankia has
attracted over 2bn of orders for its first bank capital trade,
which represents the next step on the bank's road to
The Tier 2 10-year bond callable after five years is being
marketed at a yield of low 4%, the tightest level Bankia could
ever have achieved for such a risky offering since its
inception, according to a banker.
"This is another feather in Bankia's cap," he said.
"Bankia's senior unsecured bonds have performed so well and
other peripheral issuers like Portugal's BES have proved that
these kinds of banks can raise capital."
Bankia's appearance in the subordinated bond market marks a
significant turning point after the country's banks were
crippled by a 2008 real estate crash that led several into state
Peripheral bank spreads have aggressively tightened over the
past six months, as shown by a 75bp performance for Bankia's
most recent senior deal - a 1bn five-year that priced at
mid-swaps plus 235bp in January.
In 2012, Bankia made a loss of over 19bn - the biggest in
Spanish corporate history - but has since returned to profit,
after it was cleansed of its soured property assets.
CaixaBank sold the first Spanish Tier 2 since the financial
crisis in late October last year. The 750m 10-year non-call
five-year deal priced at mid-swaps plus 395bp, and was quoted at
plus 216bp prior to Bankia's announcement, according to
Syndicate officials used CaixaBank's and BBVA's senior and
subordinated debt to get a sense of fair relative value, which
was put at around mid-swaps plus 300bp. They then added around
25-37bp of new issue premium to whet investor appetite and got
to a yield of 4.125-4.25%.
"Although this is a very attractive level we had some good
feedback from investors that suggested this yield would work,"
said the syndicate banker.
Bank of America Merrill Lynch, Bankia's own investment
banking unit, Barclays, Credit Agricole CIB and Goldman Sachs
will price the deal later on Tuesday.
(Reporting by Aimee Donnellan, editing by Julian Baker)