CaixaBank sells €1 billion in 10-year mortgage covered bonds, attracting demand of €2.6 billion

88% of demand came from international investors

• The issue price was 80 basis points over the mid-swap rate and better than expected thanks to strong investor demand.
• This first issue since 2007 will further boost the bank's excellent liquidity position, 60,762 million at year-end 2013, and satisfies demand from institutional investors for this product.

CaixaBank, Spain's largest bank by market share, today completed its first 10-year mortgage covered bond issue since 2007, selling a total of €1 billion and attracting demand in excess of €2.6 billion.

The success of the issue was reflected in the price, set 80 basis points above the mid-swap rate, used as a benchmark for such issues, meaning funding some 67 points below the Treasury rate. Thanks to a good performance from the issue, the initial spread narrowed by nearly 10 basis points, with the coupon finally standing at 2.625%.

This new issue reinforces CaixaBank's already excellent liquidity position, which stood at €60,762 million at year-end 2013, representing 17.9% of total assets. Meanwhile, the bank, with Isidro Fainé as Chairman and Juan María Nin as CEO, also kept up its high solvency levels, with a core capital ratio (Basel II) at year-end 2013 of 12.9%, after generating 193 basis points over the year and recording a Basel III fully loaded core capital ratio of 11.7%.

Strong international demand

CaixaBank capitalised on positive market conditions to kick off its corporate issue program this year, demonstrating the market's confidence in the bank and the value that investors place in its strengths. This issue was very well received by institutional investors, attracting more than 150 orders. Demand from institutional investors stood out at 88% of the total, which again revealed powerful international interest in CaixaBank issues.

Successful CaixaBank issues in 2013

CaixaBank's issues in 2013 were a great success, both in terms of the total amount issued, at €5,344 million, and the demand attracted from institutional investors in each issue.

Over the full year CaixaBank issued 3.0 billion euro in senior bonds, a €1bn issue of mortgage covered bonds, a 750 million issue of subordinated bonds and a €594mn issue of bonds exchangeable for Repsol stock.

CaixaBank expects this mortgage covered bond issue to receive credit ratings of A1 and AA- from Moody's and Standard&Poor's respectively.

The underwriters were CaixaBank, Crédit Agricole, HSBC, JP Morgan and UBS.