LONDON, March 16 (IFR) - Portugal's Caixa Geral de Depositos
will meet investors from next Monday ahead of a planned
Additional Tier 1 transaction, part of a package designed to
nurse the state-rescued lender back to health.
Caixa Geral de Depositos confirmed to IFR last month that it
had mandated banks for a deal, also the first AT1 trade out of
On Thursday it announced investor meetings starting Monday
March 20 via Barclays, Caixa - Banco de Investimento, Citigroup,
Deutsche Bank and JP Morgan ahead of a €500m no-grow perpetual
The trade will gauge the extent to which investors are
willing to stomach debt from a low rated peripheral issuer after
a period when much stronger credits, such as Intesa, Credit
Suisse and Barclays, have dominated AT1 supply.
UniCredit sold a BB- rated €500m AT1 last December but opted
for a private placement to mitigate execution risk. Bankinter
sold a €200m perp NC5 (Ba3) last April at 8.625%, but only in a
Market access for Portuguese banks has been completely
untested since 2015, even in a covered format - considered the
safest type of bank debt. Though Portugal's largest bank by
assets, CGD is a blind spot for many international investors and
posted a net loss of €189m in the first nine months of 2016.
The bond is part of a recapitalisation plan agreed in August
last year after months of negotiations with Brussels. The bank
plans to issue €1bn in subordinated debt in total.
Portugal's finance minister said in November that the
government planned to inject up to €2.7bn at the time of the
first €500m of subordinated debt issuance, with the remaining
€500m to be launched up to 18 months later.
The bonds will be written down on a temporary basis should
the bank's Common Equity Tier 1 fall below 5.125%. Its CET1
ratio took a knock last year, slipping to 10.2% on a phased-in
basis as of September 2016, from 10.7% in September 2015.
(Reporting by Alice Gledhill, editing by Helene Durand, Julian