BBVA Continental Pays For Step Up

BBVA Continental boosted its Tier 1 capital with a $200m 2040 NC10 step-up issue. The Peruvian unit of the Spanish global bank drew about $1bn in orders, according to bankers on it. The deal landed at par with a 7.375% coupon to yield the tight end of 7.500% area guidance. After the 10-year no-call period, the bond pays a floating rate of Libor plus 680.2bp. The bond was heard up 2 points in the aftermarket Thursday, following talk in the market that it was coming cheap. Pricing falls between the roughly 7.0% yield of BCP’s hybrid step-up and the 7.5% level of Interbank’s hybrid, according to a New York-based EM investor looking at the deal, adding that a price comparison is tricky, as the secondary is not very liquid. Continental is expected to use proceeds for general corporate purposes and to strengthen its balance sheet. The bond makes use of a loan participation note structure to avoid a withholding tax. BBVA and Credit Suisse managed the sale, rated BB/BBB minus.