27th Nov 2006 09:00
Banco Bilbao Vizcaya Argentaria SA27 November 2006 DISCLOSURE OF RELEVANT EVENT BBVA reports that its board of directors, 24th November 2006, in exercise of theauthority conferred by the Annual General Meeting of 28th February 2004, hasresolved to increase BBVA's share capital by a nominal amount of €81,350,304.21,issuing and putting into circulation 166,021,029 ordinary shares of €0.49nominal value each, from the same class and series as existing BBVA shares, andto be represented in book entries. Capital Increase: Purpose. This capital increase aims to raise approximately €3 bn with the purpose ofreinforcing BBVA's equity structure in such a way as to achieve the Group'sforecast growth whilst maintaining capital adequacy suitable for its volume ofbusiness and position in the market. Accelerated bookbuilding procedure. The capital issue shall be carried out by private placement amongst qualifiedinstitutional investors (the "Investors") using the accelerated bookbuildingprocedure, which will be implemented as follows: (a) The demand prospecting (bookbuilding) period, during whichproposals will be formulated by the Investors to subscribe to the shares willbegin today, 27th November 2006. Its maximum duration will be two working days,although the issuer may bring forward the deadline at its discretion. (b) Once the bookbuilding period has concluded, the bid price will bedetermined and subscription proposals shortlisted, after which the shortlistedsubscription proposals will be confirmed and the shares definitively allocatedto investors. (c) Once the shares are allocated, the bookrunners will subscribe andpay them up in their own name but to the account of the final Investors.Afterwards, the public capital increase deed will be granted and filed with theVizcaya Company Registry, and IBERCLEAR will allocate the registry referencesfor the shares to the bookrunners. Once the new shares are officially listed,the special stock-exchange transaction will transfer the shares to the finalInvestors. (d) Finally, the special stock-exchange transaction will be settled andthe corresponding money be paid up by the final investors. BBVA will duly inform the market of the progress of the capital increase byfiling the corresponding relevant events. The dates given above may be altered in view of events. In order to ensure the most suitable, efficient placement of its shares, BBVAhas signed a placement agreement with Merrill Lynch International and MorganStanley & Co. International ltd. (the "Bookrunner Banks") who, along with BBVA,will disseminate and promote the offering exclusively amongst qualifiedinstitutional investors. At the end of the private placement period, onceexisting demand is known through the bookbuilding process, the price will bedetermined. Issue price - Pricing procedure The shares will be issued at their nominal value of €0.49 each, plus the issuepremium determined under the terms and conditions set out below. The issue price will be established with the help of the Bookrunner Banksspecialising in equity distribution and with proven expertise in this type ofoperation. In this manner, once this Relevant Event has been disseminated, theBookrunner Banks selected will intensively market the offering exclusivelyamongst qualified investors that are able to rapidly assess the offering anddetermine the amount and the price that they would be willing to pay. In an accelerated increase, the issue price of the new shares will beestablished according to the outcome of the bookbuilding process that theBookrunner Banks carry out on behalf of the issuer. Once the placement price is established by the bookbuilding process, the finalterms and conditions of the capital increase will be specified and, inparticular, the issue price for the new shares, the number of shares to beissued, and exactly when the increase will be executed. Pursuant to article 159 of the Companies Act, an independent auditor designatedby the Vizcaya Company Registry has issued the necessary report, concluding thatthe minimum issue price corresponds with the fair value of the Bank's shares. Minimum Price In accordance with the procedure described for accelerated capital increases,the final price will necessarily be determined at the end of the process andfollowing the resolution to issue capital adopted by the board of directors,24th November 2006. Consequently, as is habitual in this type of operation, the BBVA board ofdirectors has resolved to establish a minimum issue price below which thecapital increase may not be put into effect. The minimum price has beenestablished at €18.07 per share. This minimum price has been determined in viewof the closing market price of the BBVA share the day prior to the board ofdirectors' resolution, ie, the closing price from 23rd November 2006, and inview of the analysis of past data following the habitual methodology used by themarket to estimate the value at risk in a financial investment (VaR). The fairness of this minimum price has been confirmed by the obligatory reportfrom an accounts auditor other than the auditor of the Company's books,designated for such purpose by the Company Registry. In the case the shares are issued at this minimum price, the amount of 3 bn ofcapital increase mentioned above would be reached with an issue of 166,021,029shares, which in turn would correspond to approximately 4.9% of BBVA's issuedcapital. Incomplete subscription The resolution expressly envisages the possibility of incomplete subscription tothe capital increase or even its non-execution. Disbursement of shares Under the structure described, the capital increase and the new BBVA shares willbe paid up in cash. To expedite the listing of the new shares, they shallinitially be subscribed and fully paid up by the bookrunner banks that will actin their own name and to the account of third parties, to immediately pass themon to the institutional investors that have confirmed their call orders over theshares. Offering targets - Exclusion of preemptive subscription rights The shares shall be exclusively targeted at qualified investors, as definedunder article 39 of Royal Decree 1310/2005, residing either inside or outsideSpain, principally those described in its paragraph one, ie, targets shall belegally-recognised entities authorised or regulated to operate on financialmarkets, including financial institutions, investment service enterprises, otherauthorised or regulated financial entities, insurance companies, collectiveinvestment institutions and their management companies, pension funds and theirmanagement companies, authorised commodity derivative brokers, and entitieswhose sole activity is securities investment even if not authorised orregulated. This issue shall, consequently, not be a public offering on any securitiesmarket. On grounds of corporate interest, it has been resolved to suppress thepreemptive subscription right, since this is necessary in order to use themechanism described aimed at raising funds at the most favourable pricepossible, minimising the financial risks of the operation and taking advantageof the best conditions on the financial markets. To such end, the board ofdirectors has approved its corresponding directors' report which will be dulydisclosed to the shareholders for the Company's next General Meeting. Additionally, according to applicable regulations, the issue price of the sharesmust correspond to their fair value. In order to determine the fair value of theshares to be issued, the Vizcaya Company Registry was requested to designate anaccounts auditor, other than the auditor of the Bank's accounts, pursuant toarticle 159.1.c) of the Company Act. The Vizcaya Company Registry has named Ernst & Young as auditor other than theauditor of the Bank's accounts. Ernst & Young has accepted the commission andhas issued its report, under its own liability, confirming the above. BBVA has drawn up the obligatory directors' report, which, along with the reportfrom the accounts auditor designated by the Company Registry, pursuant toarticle 159.2 will be made available to the shareholders and communicated at thenext General Meeting to be held. Rights of the new shares The newly issued shares shall be ordinary shares, the same as those currently incirculation. They shall be represented by book entries to be recorded bySociedad de Gestion de los Sistemas de Registro, Compensacion y Liquidacion deValores, S.A. (Iberclear) and its partner companies. The new shares shall entitle their holders to their part of any corporateearnings paid out after the date on which they are recorded in the Iberclearbooks and included in total net worth after settlement. BBVA has requested CNMV, pursuant to article 33 of the Securities Market Act,that in order to ensure suitable dissemination of this information, it suspendtrading of BBVA shares during the period of time it deems prudent. Secondary organised markets where the shares are listed. Request for officiallisting BBVA shares are listed on the securities exchanges in Madrid, Barcelona, Bilbaoand Valencia through the round-the-clock linked-exchange trading system (Sistemade Interconexion Bursatil, Mercado Continuo) and on the exchanges in Frankfurt,London, Milan, Mexico and Zurich and, as ADS's, on the New York Stock Exchange. BBVA will request official listing of the new BBVA shares to be issued by virtueof the capital increase on the securities exchanges in Madrid, Barcelona, Bilbaoand Valencia, so that they be traded through the round-the-clock linked-exchangetrading system (Sistema de Interconexion Bursatil, Mercado Continuo). Today, at 10:00 a.m. (Madrid time) the transaction shall be presented toanalysts and investors. There will be a live webcast of the presentation whichmay be accessed from BBVA's corporate site (www.bbva.com) and which will beavailable for replay at BBVA's corporate web during at least the followingmonth. November 2006, 27th Press Release 27 Nov 2006 BBVA €3.0bn capital increase O The purpose of the transaction is to raise BBVA's core capital ratioabove 6%, after the acquisitions made by the Group since 2004, and to fund itsstrong organic growth BBVA has informed the CNMV today that it will increase capital by €3bn. Thetransaction will be executed through an accelerated bookbuilt placement directedto qualified institutional investors only. The objective of the capital increase approved by the Board of Directors of BBVAlast Friday November 24th is intended to raise core capital above 6%, inaccordance with BBVA's stated capital management policy. As a result of the capital increase, BBVA will be able to fund its futureorganic growth, whilst maintaining its solvency ratios, volume of activity andmarket position. The pricing of the transaction will be determined after a bookbuilding process,which will be executed over two days, subject to acceleration. In order to waive shareholder pre-emption rights, Spanish regulation requires aminimum issue price to be established by the Board of Directors of BBVA, belowwhich the shares cannot be legally issued. This minimum issue price has been setat €18.07. The Joint Global Coordinators are BBVA, Merrill Lynch and Morgan Stanley. TheJoint Bookrunners are Merrill Lynch and Morgan Stanley, and BBVA will act asco-Bookrunner. €4.6bn in acquisitions The last capital increase executed by BBVA took place in February 2004, to fundthe purchase of the BBVA Bancomer minorities. In the last two and a half years, BBVA has made, among others, the acquisitionsof Hipotecaria Nacional in Mexico, Granahorrar in Colombia, and Forum in Chile.It has also acquired Laredo National Bancshares, Texas Regional Bancshares andState National Bancshares as part of its expansion plan in the US. BBVA has justannounced the agreement to acquire a 5% stake in China CITIC Bank (CNCB) and a15% stake in CITIC International Financial Holdings (CIFH). In aggregate, these acquisitions amount to a total of €4.6bn. Such acquisitionsreinforce the Group's organic growth, and have not required any capital increaseuntil now. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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