Bloomberg News

Sabadell Boosts Core Capital With Swap of Preference Shares

January 03, 2012

(Updates with more details of exchange in third paragraph.)

Jan. 3 (Bloomberg) -- Banco Sabadell SA raised 797 million euros ($1.04 billion) with an exchange of preference shares for stock as Spanish lenders seek to bolster their capital ratios.

The acceptance rate for the exchange offer announced last month was 94 percent, the Sabadell, Spain-based bank said today in an e-mailed statement.

The bank will issue 223.2 million new shares for the exchange, equivalent to 13.8 percent of its share capital, to boost its September core capital ratio by 145 basis points to 10.55 percent, Sabadell said. Sabadell is set to become Spain’s fifth-biggest bank after agreeing last month to absorb Caja de Ahorros del Mediterraneo, a lender seized by the Bank of Spain.

Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA, Spain’s biggest banks, have also used exchanges of preference shares sold to retail customers as a way to raise capital. BBVA said Dec. 22 it would issue 3.43 billion euros of bonds that automatically convert into stock in exchange for preference shares and Santander said Dec. 28 it would boost core capital by 34 basis points with a 1.94 billion-euro exchange.

A basis point in one-hundredth of a percentage point.

--Editors: Dylan Griffiths, Stephen Taylor.

To contact the reporters on this story: Charles Penty in Madrid at

To contact the editor responsible for this story: Frank Connelly at

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