TIDMBVA
RNS Number : 8250R
Banco Bilbao Vizcaya Argentaria SA
08 July 2022
Banco Bilbao Vizcaya Argentaria, S.A. ("BBVA" or the "Issuer"),
in accordance with the provisions of the Securities Market
legislation, communicates the following:
OTHER RELEVANT INFORMATION
Following today's entry into force, effective today, of the
First Book of Royal Decree-law 24/2021, of November 2, on the
transposition of European Union directives in the areas of covered
bonds, cross-border distribution of collective investment
undertakings, open data and reuse of public sector information,
exercise of copyright and related rights applicable to certain
online transmissions and retransmissions of radio and television
programs, temporary exemptions for certain imports and supplies,
for consumers and for the promotion of clean and energy efficient
road transport vehicles (the "Royal Decree-law 24/2021"), it is
hereby stated that the mortgage bonds already issued by BBVA and
which are still outstanding (a list of which is included in Annex 1
to this press release):
(i) They will maintain their current conditions under the
specific terms included in the corresponding issue documents
(securities, if any, and final terms) under which they are issued
(term, maturity date, interest, etc.).
(ii) They are covered under BBVA's mortgage bond program
approved by the Bank of Spain on July 4, 2022 (effective as of July
8, 2022, coinciding with the entry into force of Royal Decree-Law
24/2021) and which will be in force until July 8, 2025 (the
"Program").
(iii) That, in accordance with Royal Decree-law 24/2021, the new
cover pool of the aforementioned mortgage bonds will become that
established for such covered bonds as set forth in the Program.
(iv) That the cover pool monitor of the Program designated by
BBVA pursuant to the provisions set forth in Chapter 1, Title VI,
of the First Book of Royal Decree-law 24/2021 is Deloitte Advisory,
S.L., as authorized by the Bank of Spain on July 4, 2022 (effective
as of July 8, 2022, coinciding with the entry into force of Royal
Decree-Law 24/2021).
(v) In accordance with the provisions of Royal Decree-law
24/2021, and in particular with its First Transitory Provision, as
from July 8, 2022, the issues listed in Annex 1 will be subject to
the application of Royal Decree-law 24/2021, and therefore the
conditions of the Program, without the holders of such securities
having any action against BBVA as issuer to claim their early
maturity as a consequence of this modification in the legal
regime.
(vi) The information published by BBVA on the Program, in
accordance with article 19 of Royal Decree-law 24/2021, will be
available, from the moment such information is available, on the
website
https://shareholdersandinvestors.bbva.com/debt-investors/issuances-programs/covered-bonds
and will include: value of the cover pool; geographic distribution
and type of cover assets; valuation method of the loans and assets
under guarantee; market, interest rate, currency, credit and
liquidity risks; maturity structure of the hedging assets and
liabilities; levels of necessary and available coverage; levels of
legal, contractual and voluntary overcollateralization; percentage
of loans in which a default is considered to have occurred; and
identification of the cover pool monitor. The Issuer shall update
such information on a quarterly basis in accordance with the
provisions of the aforementioned article 19 of Royal Decree-Law
24/2021. In addition, the necessary information on the transition
process in accordance with the Second Transitory Provision of Royal
Decree-law 24/2021 will be available on said website..
Regardless of the full application of Royal Decree-law 24/2021,
a summary of some relevant aspects of the same is attached as Annex
2.
Madrid, on July 8, 2022.
ANNEX 1
LIST OF MORTGAGE BONDS ISSUED AND OUTSTANDING
ISIN Maturity Outstanding principal
(DD/MM/YYYY) (EUR)
-------------------- -------------- ----------------------
ES0312298021 14/12/2022 72.592.592
-------------------- -------------- ----------------------
ES0312298021 14/12/2022 95.000.000
-------------------- -------------- ----------------------
ES0413211790 30/01/2023 1.000.000.000
-------------------- -------------- ----------------------
ES0413211873 18/03/2023 1.250.000.000
-------------------- -------------- ----------------------
ES0413211949 29/03/2023 3.000.000.000
-------------------- -------------- ----------------------
ES0413211774 02/06/2023 500.000.000
-------------------- -------------- ----------------------
ES0413211956 26/07/2023 3.000.000.000
-------------------- -------------- ----------------------
ES0413211972 10/10/2023 2.500.000.000
-------------------- -------------- ----------------------
ES0312298096 25/10/2023 100.000.000
-------------------- -------------- ----------------------
ES0413211816 12/06/2024 1.000.000.000
-------------------- -------------- ----------------------
ES0413211071 25/02/2025 2.000.000.000
-------------------- -------------- ----------------------
ES0413211840 14/05/2025 2.000.000.000
-------------------- -------------- ----------------------
ES0317046003 21/05/2025 200.000.000
-------------------- -------------- ----------------------
ES0317046003-RETAP6 21/05/2025 60.000.000
-------------------- -------------- ----------------------
ES0317046003 23/05/2025 60.000.000
-------------------- -------------- ----------------------
ES0312342019 28/06/2025 51.282.051
-------------------- -------------- ----------------------
ES0413211A18 14/10/2025 2.000.000.000
-------------------- -------------- ----------------------
ES0413211A26 25/01/2026 1.500.000.000
-------------------- -------------- ----------------------
ES0413211915 22/11/2026 1.000.000.000
-------------------- -------------- ----------------------
ES0312298120 25/05/2027 100.000.000
-------------------- -------------- ----------------------
XS0308135291 01/10/2027 110.556.653
-------------------- -------------- ----------------------
ES0413211923 15/01/2028 3.000.000.000
-------------------- -------------- ----------------------
ES0371622020 08/04/2031 500.000.000
-------------------- -------------- ----------------------
ES0371622020 10/04/2031 150.000.000
-------------------- -------------- ----------------------
ES0413211147 02/02/2037 200.000.000
-------------------- -------------- ----------------------
ES0413211A34 17/05/2026 3.000.000.000
-------------------- -------------- ----------------------
ES0413211A59 02/02/2027 1.500.000.000
ANNEX 2
Description of the new Royal Decree-Law 24/2021, applicable to
Mortgage Bonds
Pursuant to Article 2 of Royal Decree-Law 24/2021, the following
definitions apply:
a. "Covered Bond", the mortgage cover bonds, public sector cover
bonds or internationalization cover bonds issued by a credit
institution in accordance with the provisions of the Royal
Decree-law 24/2021 and secured by hedging assets of their
corresponding cover pools to which the investors of these bonds may
have direct recourse in their capacity as preferred creditors.
b. "covered bond program" the structural characteristics of one
or several issues of a type of Covered Bond that are determined by
applicable legal regulation and by contractual clauses and
conditions, in accordance with the permission granted to BBVA by
the Bank of Spain.
c. "cover pool" a pool of clearly defined assets that secure the
payment obligations attached to a determined Covered Bond program
and that are segregable from other assets of the issuing entity in
the cases provided for by law.
The Covered Bonds, like the Mortgage Bonds, represent
unsubordinated debt for the Issuer, bear interest, are repayable by
early redemption or at maturity, and may be traded in domestic
and/or foreign markets.
Without prejudice to the universal patrimonial responsibility of
the Issuer, the totality of the principal and interest of the
Mortgage Bonds, both accrued and future, will be specially
guaranteed without the need to assign the assets in guarantee by
public deed, nor any registration in any public registry or any
other formality by a preferential right on the totality of the
assets that make up its cover pool, including their present and
future yields, as well as any collateral received, if applicable,
in connection with positions in derivative contracts and any damage
insurance rights, identified in the corresponding special registry
of the Issuer, all in accordance with the legislation in force.
Covered Bonds Program
The Mortgage Bonds as Covered Bonds, in accordance with Royal
Decree-law 24/2021, require the prior administrative authorization
in force by the Bank of Spain of the "covered bond program" of each
category of Guaranteed Bonds, in accordance with article 34 of
Royal Decree-Law 24/2021.
Cover pool of the Program
From the date of entry into force of Royal Decree-law 24/2021,
the Mortgage Bonds will be specially guaranteed by the assets of
the coverage pool specified in the Program, which in accordance
with the legislation will be comprised of the following assets:
(i) The eligible primary assets listed in letters d) and f) of
Article 129. 1 of Regulation No. 575/2013 of the European
Parliament and of the Council of 26 June 2013, on prudential
requirements for credit institutions, and amending Regulation (EU)
No. 648/2012, and which form part of its cover pool, by the
eligible replacement assets, by the liquid assets that make up the
liquidity buffer of its cover pool, and by the economic flows
generated by the derivative financial instruments linked to each
issue, all in accordance with the legislation in force and the
corresponding issue program authorized by the Bank of Spain.
These eligible assets will be: a) loans secured by residential
(or commercial) real estate up to the lesser of the principal
amount of the mortgages, combined with any prior mortgages, and 80%
(60% in the case of commercial real estate) of the value of the
pledged assets; or b), if applicable, non-subordinated
participations issued by securitization vehicles of the Member
States of the European Union, provided that: (i) in turn these
participations are backed by real estate mortgages; (ii) the
participations are admitted to credit quality level 1; and (iii)
such participations do not exceed 10% of the nominal amount of the
outstanding issue of such securitization vehicle, and in any case
in accordance with the provisions of Regulation 575/2013 of the
European Parliament and of the Council of 26 June 2013 from time to
time.
In addition to meeting the conditions set forth in Chapter 4 of
Regulation (EU) No. 575/2013 of 26 June 2013, the real estate
mortgage securing the loans must be constituted with first rank
over the full ownership of the entire property. If other mortgages
are encumbered on the same property or if it is subject to
prohibitions of disposition, resolutory condition or any other
limitation of the domain, these must be cancelled or postponed to
the mortgage that is constituted prior to its inclusion in the
coverage set.
(ii) At the time of its incorporation into the coverage pool,
the loan secured by real estate mortgage may not exceed 60% of the
appraised value of the mortgaged property. In the case of
residential real estate, the loan may reach 80% of the appraised
value. The term of amortization of the guaranteed loan, when it
finances the acquisition, construction or rehabilitation of the
habitual residence, may not exceed 30 years. If, as a consequence
of the amortization of a loan initially ineligible for exceeding
the indicated limits, the corresponding thresholds are reached, the
loan with mortgage guarantee could be eligible as a collateral
asset from that moment onwards.
When, due to depreciation of the collateral, at any time after
its incorporation to the coverage set, the loan exceeds the limits
set forth in the preceding paragraph, such loan shall be computed
up to the limit indicated therein for the purposes of the coverage
requirement set forth in article 10.5 of Royal Decree-Law
24/2021.
(iii) The Mortgage Bonds may be backed up to a limit of 10% of
the principal amount by the following substitute assets:
a. fixed income securities admitted to trading on regulated
markets issued by (a) central governments or central banks of the
ESCB, public sector entities, regional governments or local
authorities of the European Union, or guaranteed by them, and (b)
central governments or central banks of third countries,
multilateral development banks, international organizations, public
sector entities, regional governments or local authorities of third
countries, all of them with credit quality step 1, or guaranteed by
them; and/or
b. short-term deposits in credit institutions that comply with
the provisions of Article 129.1 (c) of Regulation No. 575/2013 of
the European Parliament and of the Council of 26 June 2013 on
prudential requirements for credit institutions and amending
Regulation (EU) No. 648/2012.
(iv) If, due to the amortization of the loans comprising the
coverage pool, the replacement assets exceed the applicable limits,
the Issuer may choose to acquire its own mortgage bonds until the
ratio is restored or replace them with other coverage assets that
meet the required conditions.
(v) The Mortgage Bonds Securities must have the minimum level of
legal over-collateralization provided for in the first paragraph of
Article 129.3a of Regulation (EU) No. 575/2013 of 26 June 2013.
(vi) The mortgaged property shall be insured against damage for
at least the appraised value and the credit claim linked to the
insurance shall be included in the special register of the Mortgage
Bond program.
(vii) The Issuer may not with respect to the loans subject to
the cover pool, except with the express authorization of the cover
pool monitor and, if applicable, subject to the conditions that it
may establish:
a. Voluntarily cancel said mortgages, for reasons other than the payment of the guaranteed loan.
b. To waive or compromise on them.
c. Condone in whole or in part the guaranteed loan.
d. In general, perform any act that diminishes the rank, legal
effectiveness or economic value of the mortgage or loan.
e. Postpone existing mortgages in its favor as security for loans.
Assets consisting of credits or loans shall be included in the
cover pool and shall serve as collateral for the total amount of
the principal outstanding, regardless of the amount with which they
contribute to the cover. In no case may the same asset belong to
two different cover pools. Partial inclusion of assets in the cover
pool is also not permitted.
The covered bond programs shall guarantee that, at all times,
the liabilities of the Coverd Bonds of said program are covered by
the credit rights linked to the hedging assets under the terms set
forth in Royal Decree-Law 24/2021.
Special accounting record
Pursuant to article 9 of Royal Decree-law 24/2021, BBVA keeps a
special accounting record where each and every one of the loans
and, if applicable, the drawn portion of the credits, replacement
assets, assets to cover the liquidity requirement and derivative
instruments, which make up each of the coverage pools of each
Covered Bond program, as well as, if applicable, any collateral
received in connection with positions in derivative instruments and
any credit rights derived from the insurance against damages
attached to the issue, are recorded.
Nature and regime of the cover pool
Pursuant to Article 7 of Royal Decree-law 24/2021, every Covered
Bond program must have, at all times, a cover pool. The Issuer
shall ensure that the cover pool is made up of collateral with
different characteristics in terms of structure, duration and risk
profile.
For these purposes, the Issuer shall have internal policies and
procedures to ensure compliance with this principle in the
composition of the portfolio and that meet, in particular, the
following requirements:
a. they must explicitly include internal rules and tests of
granularity and concentration, on potential maturity, duration and
interest rate mismatches and, if applicable, exchange rates;
b. they must be approved by the Issuer's management body; and
c. the part of the information on such policies and procedures
that is most relevant to the investor must be included in the
contractual terms and conditions.
Control Body of the cover pool of each Program
The Issuer must, in accordance with article 30 of Royal
Decree-law 24/2021, have for each Covered Bond program, the
designation of a cover pool monitor, which will act at all times in
the interest of the investors and whose function is to permanently
monitor the cover pool associated with each Covered Bond issued.
The cover pool monitor is in charge, amongst other things, of
authorizing the entries and exits of the special register of each
cover pool.
In any case, each cover pool must have a control body, which may
be external or internal, and which will be appointed in accordance
with the provisions of article 31 of Royal Decree-law 24/2021.
Supervision by the Bank of Spain
The public supervision of the Covered Bonds programs will
correspond to the Bank of Spain, which must provide its
authorization for the formalization of a Covered Bonds program, and
has the power to obtain the necessary information, carry out as
many investigation activities and impose such sanctions as may be
necessary to perform its supervisory function and ensure that the
requirements set forth in Royal Decree-law 24/2021 are complied
with. In this regard, the Issuer shall provide to the Bank of Spain
upon request any information that the Bank of Spain deems necessary
and, at least on a quarterly basis, the information required by
Article 35 of Royal Decree-law 24/2021.
Order of priority and effects of the Issuer's tendering
process
The Covered Bonds incorporate the holder's credit right against
the Issuer and shall be enforceable under the terms set forth in
Law 1/2000, of January 7, on Civil Proceedings, in order to claim
payment from the Issuer after their maturity. The credit right
shall extend to the totality of the payment obligations associated
with the Covered Bonds.
The holders of the Covered Bonds shall have the status of
creditors with special preference provided for in number 8 of
article 1922 and number 6 of article 1923 of the Civil Code, as
opposed to any other creditors in relation to the loans and credits
integrated in the corresponding cover pool, to the replacement
assets and to the economic flows generated by the derivative
instruments or credits derived from the insurance against damages,
if it exists, in accordance with the provisions of Chapter III,
Title XVII, of Book Four of the Civil Code.
All holders of Covered Bonds, regardless of their date of issue,
will have the same priority over the loans and credits that
guarantee them and, if any, over the replacement assets and over
the economic flows generated by the derivative financial
instruments linked to the specific issues.
Likewise, in the event of insolvency of the Issuer, the holders
of the Covered Bonds will enjoy the special privilege established
in number 7 of article 270 of the consolidated text of the
Insolvency Law, approved by THE Royal Legislative Decree 1/2020, of
May 5.
The opening of the insolvency proceedings or the resolution of
the Issuer, notwithstanding the fact that, if applicable, it may
result in the extension of the maturity of any issue of Covered
Bonds, shall in no case:
(i) shall produce the automatic early termination of the payment
obligations associated with the Covered Bonds, nor shall it affect
in any way the fulfillment of the rest of the obligations
associated with the Covered Bonds, without prejudice to the
provisions of Article 42.2 of Law 11/2015 of June 18, on the
recovery and resolution of credit institutions and investment
services companies;
(ii) entitle the holder of Covered Bonds to urge their early maturity;
(iii) entail the suspension of the accrual of interest on the
Covered Bonds; nor
(iv) be cause for maturity or early termination of the
derivative contracts integrated in a hedging pool.
In the event of insolvency of the Issuer, a special
administrator will be appointed, from among the persons proposed by
the FROB, to administer the corresponding Covered Bonds program and
to watch over the rights and interests of the investors, after
consulting the Bank of Spain, materially segregating from the
Issuer's assets from the assets comprising the cover pool of each
Covered Bonds program, becoming a separate asset without legal
personality.
The segregation implies that the hedging assets:
(i) do not form part of the insolvency estate until the
privileged credit right of the holders of the Covered Bonds and the
derivative counterparties and the expenses derived with the
maintenance and administration of the separate estate and, if
applicable, with its liquidation are satisfied; and
(ii) are protected against the rights of third parties and
cannot be rescinded by application of the reinstatement actions
provided for in the insolvency legislation, except in the case
provided for in Article 42.2 of Royal Decree-Law 24/2021.
The special administrator will determine that the assets
registered in the special registry, together with the corresponding
liabilities, are transferred to form the separate estate without
legal personality.
Once the transfer has been made, if the total value of the
assets is greater than the total value of the liabilities plus the
legal, contractual or voluntary over-collateralization and the
liquidity requirement, the special administrator may decide whether
to continue with the current management of the separate estate
until its maturity or to make a total or partial transfer of the
separate estate to another entity issuing covered bonds. In any
case, it will be understood that the total or partial assignment
constitutes a new program for such entity, which will require the
authorization provided for in Article 34 of Royal Decree-Law
24/2021.
On the other hand, if the total value of the assets is less than
the total value of the liabilities plus the legal, contractual or
voluntary over-collateralization and the liquidity requirement, the
special administrator will request the liquidation of the separate
estate following the ordinary bankruptcy procedure in accordance
with the provisions of Article 46 of Royal Decree-Law 24/2021.
In the event that the privileged claim cannot be fully settled
against the cover pool, the holders of the Covered Bonds will have
a claim against the Issuer with the same priority as the other
claims of the unsecured creditors. If, once the credit with the
investors in the Covered Bonds is fully settled against the cover
pool, there is any remainder, it will correspond to the insolvency
estate.
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END
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