By Ed Frankl
Banco de Sabadell SA said late Wednesday that it would issue perpetual preferred securities potentially convertible to shares worth 500 million euros ($530.3 million).
The remuneration of the contingent convertibles, sometimes known as CoCos, has been set at 9.375% per year, payable quarterly and ending in January 2029, the Spanish bank said.
The securities can be converted to newly issued ordinary shares if its common equity Tier 1 ratio falls below 5.125%, Sabadell said.
The bank's CET1 ratio at the end of the third quarter of 2022 was 12.65%, according to its quarterly report, and its capital requirements under the latest European Central Bank review include a CET1 ratio of 8.65%.
The potential conversion price of the securities would be the highest of the five-day weighted average before the conversion is announced, EUR1.221, or the nominal value of an ordinary share, which on Wednesday was 12.5 European cents.
Write to Ed Frankl at edward.frankl@dowjones.com
(END) Dow Jones Newswires
01-05-23 0352ET