Obligation BBVA Banco 5.875% ( ES0813211002 ) en EUR

BBVA Banco

100 % ⇌

Espagne

ES0813211002 ( en EUR )

5.875% par an ( paiement trimestriel )

Perpétuelle

Prospectus brochure de l'obligation BBVA ES0813211002 en EUR 5.875%, échéance Perpétuelle

24/09/2025 ( Dans 138 jours )

BBVA est une banque multinationale espagnole offrant une large gamme de services financiers, notamment la banque de détail, la gestion d'actifs et l'investissement bancaire, opérant principalement en Espagne, en Amérique latine et aux États-Unis.

L'Obligation émise par BBVA Banco ( Espagne ) , en EUR, avec le code ISIN ES0813211002, paye un coupon de 5.875% par an.
Le paiement des coupons est trimestriel et la maturité de l'Obligation est le Perpétuelle

Prospectus dated 24th September, 2018

Banco Bilbao Vizcaya Argentaria, S.A.
(incorporated with limited liability under the laws of Spain)
Series 7 1,000,000,000 Non-Step-Up Non-Cumulative Contingent Convertible
Perpetual Preferred Tier 1 Securities
Issue price: 100 per cent.
The Series 7 1,000,000,000 Non-Step-Up Non-Cumulative Contingent Convertible Perpetual Preferred Tier 1 Securities of 200,000 liquidation preference
each (the Preferred Securities) were issued by Banco Bilbao Vizcaya Argentaria, S.A. (the Bank or BBVA) on 24th September, 2018 (the Closing Date). The
Bank and its consolidated subsidiaries are referred to herein as the Group.
The Preferred Securities will accrue non-cumulative cash distributions (Distributions) (i) in respect of the period from (and including) the Closing Date to (but
excluding) 24th September, 2023 (the First Reset Date) at the rate of 5.875 per cent. per annum, and (ii) in respect of each period from (and including) the First
Reset Date and every fifth anniversary thereof (each a Reset Date) to (but excluding) the next succeeding Reset Date (each such period, a Reset Period), at the
rate per annum, converted to a quarterly rate in accordance with market convention, equal to the aggregate of 5.66 per cent. per annum and the 5-year Mid-Swap
Rate (as defined in the terms and conditions of the Preferred Securities (the Conditions)) for the relevant Reset Period. Subject as provided in the Conditions,
such Distributions will be payable quarterly in arrear on 24th March, 24th June, 24th September and 24th December in each year (each a Distribution Payment
Date).
All, and not some only, of the Preferred Securities may be redeemed at the option of the Bank at any time on or after the First Reset Date, at the liquidation
preference of 200,000 per Preferred Security plus, if applicable, where not cancelled pursuant to, or otherwise subject to the limitations on payment set out in,
Condition 4, an amount equal to accrued and unpaid Distributions for the then current Distribution Period (as defined in the Conditions) to (but excluding) the
date fixed for redemption (the Redemption Price), subject to the prior consent of the Regulator (as defined in the Conditions), if required, and otherwise in
accordance with Applicable Banking Regulations (as defined in the Conditions) then in force. The Preferred Securities are also redeemable on or after the
Closing Date at the option of the Bank in whole but not in part, at any time, at the Redemption Price in accordance with Articles 77 and 78 of CRR, Article 29 of
the Commission Regulation (EU) 241/2014 and/or any other Applicable Banking Regulations in force at the relevant time if there is a Capital Event or a Tax
Event (each as defined in the Conditions).
The Bank may elect, in its sole and absolute discretion, to cancel the payment of any Distribution in whole or in part at any time and for any reason, including as
further provided in Condition 4. Distributions on the Preferred Securities will be non-cumulative. Accordingly, if any Distribution (or part thereof) is not made
in respect of the Preferred Securities then the right of the Holders to receive the relevant Distribution (or part thereof) will be extinguished and the Bank will
have no obligation to pay such Distribution (or part thereof) or otherwise to pay any interest in respect of the Preferred Securities, whether or not any future
Distributions on the Preferred Securities are paid. For further information, see Condition 4.
If, at any time, the CET1 ratio (as defined in the Conditions) is less than 5.125 per cent. as determined by the Bank (a Trigger Event), the Preferred
Securities are mandatorily and irrevocably convertible into newly issued ordinary shares in the capital of the Bank (Common Shares) at the Conversion
Price (as defined in the Conditions). In the event of the liquidation or winding-up of the Bank, Holders will be entitled to receive (subject as provided in
the Conditions), in respect of each Preferred Security, their respective liquidation preference of 200,000 plus any accrued and unpaid Distributions
for the then current Distribution Period to (but excluding) the date of payment of the liquidation distribution.
In addition, in the event of a Capital Reduction (as defined in the Conditions), the Preferred Securities are mandatorily and irrevocably convertible into Common
Shares unless a Holder elects that the Preferred Securities held by it shall not be so converted by delivery of a duly completed and signed Election Notice on or
before the 10th Business Day immediately following the Capital Reduction Notice Date (each as defined in the Conditions).
The Preferred Securities have been assigned a rating of Ba2 by Moody's Investors Services España, S.A. (Moody's) and a rating of BB by Fitch Ratings
España, S.A.U. (Fitch). The Bank has been rated A3 by Moody's, A- by S&P Global Ratings Europe Limited (S&P) and A- by Fitch. Each of Moody's, S&P
and Fitch is established in the European Union and is registered under Regulation (EC) No. 1060/2009 (as amended) (the CRA Regulation). As such, each of
Moody's and Fitch is included in the list of credit rating agencies published by the European Securities and Markets Authority on its website in accordance with
such Regulation. A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, change or withdrawal at any time by the
assigning rating agency.
This document constitutes a listing prospectus (the Prospectus) for the purposes of Article 3 of Directive 2003/71/EC of the European Parliament and of the
Council of the European Union (the EU), as amended and implemented in Spain (the Prospectus Directive) and has been prepared in accordance with, and
including the information required by, Annexes I, III (sections 3.1 and 3.2), XIII and XIV of Regulation (EC) No. 809/2004 (the Prospectus Regulation). This
Prospectus has been approved by the Spanish National Securities Market Commission (Comisión Nacional del Mercado de Valores) (the CNMV) in its capacity
as competent authority under the Prospectus Directive and its implementing measures in Spain, including the Spanish Securities Market Act (Royal Legislative
Decree 4/2015, of 23rd October, approving the consolidated text of the Spanish Securities Market Act; the LMV).
Application has been made for the Preferred Securities to be admitted to trading on the Spanish AIAF Fixed Income Securities Market (AIAF). If a qualified
investors platform were to be developed by AIAF, it is the intention of the Bank for the Preferred Securities to be quoted on such platform. The Preferred
Securities may also be admitted to trading on any other secondary market as may be agreed by the Bank.
Amounts payable under the Preferred Securities from and including the First Reset Date are calculated by reference to the 5-year Mid-Swap Rate (as defined in
the Conditions) which appears on the "ICESWAP2" page, which is provided by ICE Benchmark Administration Limited. As at the date of this Prospectus, ICE
Benchmark Administration Limited is included in the register of administrators and benchmarks established and maintained by the European Securities and
Markets Authority (ESMA) pursuant to Article 36 of Regulation (EU) No. 2016/1011 (the Benchmarks Regulation).
An investment in the Preferred Securities involves certain risks. For a discussion of these risks see "Risk Factors" beginning on page 14.
The Preferred Securities are complex financial instruments and are not a suitable or appropriate investment for all investors. The Preferred Securities
shall not be offered, sold or otherwise made available to retail clients in any jurisdiction of the European Economic Area (the EEA), as defined in the
rules set out in Directive 2014/65/EU (as amended, MiFID II). Prospective investors are referred to the section headed "Prohibition on marketing and
sales to retail investors" on pages 4 to 6 of this Prospectus for further information.
MiFID II professionals/ECPs-only/No PRIIPs KID/FCA PI RESTRICTION Manufacturer target market (MiFID II product governance) is eligible
counterparties and professional clients only (all distribution channels). The target market assessment indicates that the Preferred Securities are
incompatible with the needs, characteristic and objectives of retail clients and accordingly the Preferred Securities shall not be offered or sold to any
retail clients. No packaged retail and insurance-based investment products (PRIIPs) key information document (KID) has been prepared as the
Preferred Securities are not available to retail investors in the EEA.
The Preferred Securities and any Common Shares to be issued and delivered in the event of any Conversion (as defined in the Conditions) have not been, and
will not be, registered under the United States Securities Act of 1933, as amended (the Securities Act) and are subject to United States tax law requirements.
Any offering of the Preferred Securities has been and is being made outside the United States in accordance with Regulation S under the Securities Act
(Regulation S), and the Preferred Securities may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons
except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
Joint Bookrunners
Banco Bilbao Vizcaya Argentaria, S.A.
Barclays
(no underwriting commitment)

BNP Paribas
BofA Merrill Lynch
Citigroup
Credit Suisse

Co-Managers
Bankia
Bankinter

2

This Prospectus is to be read in conjunction with all documents which are incorporated
herein by reference (see "Documents Incorporated by Reference"). This Prospectus shall be read and
construed on the basis that such documents are incorporated and form part of this Prospectus.
Banco Bilbao Vizcaya Argentaria, S.A., Banco Bilbao Vizcaya Argentaria, S.A. (in its capacity as a
joint bookrunner, the Joint Lead Manager), Barclays Bank PLC, BNP Paribas, Citigroup Global
Markets Limited, Credit Suisse Securities (Europe) Limited and Merrill Lynch International (the Joint
Bookrunners), Bankia, S.A. and Bankinter, S.A. (the Co-Managers, together with the Joint Lead
Manager and the Joint Bookrunners, the Managers) have not separately verified the information
contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is
made and no responsibility or liability is accepted by the Managers or any of them as to the accuracy
or completeness of the information contained in this Prospectus or any other information provided by
the Bank in connection with the Preferred Securities or their distribution.
The Bank has not authorised the making or provision of any representation or information regarding
the Bank or the Preferred Securities other than as contained in this Prospectus or as approved for
such purpose by the Bank. Any such representation or information should not be relied upon as
having been authorised by the Bank or the Managers.
Neither the delivery of this Prospectus nor the offering or delivery of any Preferred Security shall in
any circumstances create any implication that there has been no adverse change, or any event
reasonably likely to involve any adverse change, in the condition (financial or otherwise) of the Bank
since the date of this Prospectus.
None of the Managers or any of their respective affiliates, or any of their respective directors,
officers, employees or agents, to the extent permitted by applicable law, accepts any responsibility
whatsoever for the contents of this Prospectus or for any statement made or purported to be made by
it, or on its behalf, in connection with the Bank or any offering of the Preferred Securities. The
Managers and any of their respective affiliates accordingly disclaim to the extent permitted by
applicable law, all and any liability whether arising in tort, contract, or otherwise which they might
otherwise have in respect of any such contents or statement. No representation or warranty express or
implied, is made by any of the Managers or any of their respective affiliates as to the accuracy,
completeness, reasonableness, verification or sufficiency of the information set out in this Prospectus.
The Managers are acting exclusively for the Bank and no one else in connection with any offering of
the Preferred Securities. The Managers will not regard any other person (whether a recipient of this
Prospectus or otherwise) as their client in relation to any such offering and will not be responsible to
anyone other than the Bank for providing the protections afforded to their clients or for giving advice
in relation to such offering or any transaction or arrangement referred to herein.
This Prospectus does not constitute an offer of, or an invitation to subscribe for or purchase by or on
behalf of, the Bank or the Managers any Preferred Securities.
The distribution of this Prospectus and the offering and delivery of Preferred Securities in certain
jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are
required by the Bank and the Managers to inform themselves about and to observe any such
restrictions.
The Preferred Securities have not been and will not be registered under the Securities Act and are
subject to United States tax law requirements. Subject to certain exceptions, Preferred Securities may
not be offered, sold or delivered in the United States or to U.S. persons.
In this Prospectus, unless otherwise specified, references to , EUR or euro are to the single currency
introduced at the start of the third stage of European Economic and Monetary Union pursuant to the
Treaty establishing the European Community, as amended; references to USD or U.S. dollars are to
the currency of the United States; references to Mexican peso refer to the lawful currency for the time
being of the United Mexican States; and references to Turkish lira or TL refer to the lawful currency
for the time being of the Republic of Turkey.
3

Words and expressions defined in the Conditions (see "Conditions of the Preferred Securities") shall
have the same meanings when used elsewhere in this Prospectus unless otherwise specified.
This Prospectus may only be used for the purposes for which it has been published. No person is
authorised to give information other than that contained herein and in the documents incorporated by
reference herein and which are made available for inspection by the public at the registered office of
the Bank.
Prior to making an investment decision, potential investors should consider carefully, in light of their
own financial circumstances and investment objectives, all the information contained in this
Prospectus or incorporated by reference herein. A potential investor should not invest in the
Preferred Securities unless it has the expertise (either alone or with its financial and other
professional advisers) to evaluate how the Preferred Securities will perform under changing
conditions, the resulting effects on the value of the Preferred Securities and the impact this investment
will have on the potential investor's overall investment portfolio. See further "Risk Factors Risks
related to the Preferred Securities generally The Preferred Securities may not be a suitable
investment for all investors". If a potential investor is in any doubt about any of the contents of this
Prospectus, it should obtain independent professional advice.
MiFID II product governance/Professional investors and ECPs only target market/negative target
market Solely for the purposes of each manufacturer's product approval process, the target market
assessment in respect of the Preferred Securities has led to the conclusion that: (i) the target market
for the Preferred Securities is eligible counterparties and professional clients only, each as defined in
MiFID II; and (ii) all channels for distribution of the Preferred Securities to eligible counterparties
and professional clients are appropriate. The target market assessment indicates that the Preferred
Securities are incompatible with the needs, characteristic and objectives of clients which are retail
clients (as defined in MiFID II) and accordingly the Preferred Securities shall not be offered or sold
to any retail clients. Any person subsequently offering, selling or recommending the Preferred
Securities (a distributor) should take into consideration the manufacturers' target market assessment.
However, a distributor subject to MiFID II is responsible for undertaking its own target market
assessment in respect of the Preferred Securities (by either adopting or refining the manufacturers'
target market assessment) and determining appropriate distribution channels.
Prohibition of sales to EEA retail investors The Preferred Securities shall not be offered, sold or
otherwise made available to any retail investor in the EEA. For these purposes, a "retail investor"
means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of
MiFID II; or (ii) a customer within the meaning of Directive 2002/92/EC (the Insurance Mediation
Directive), where that customer would not qualify as a professional client as defined in point (10) of
Article 4(1) of MiFID II. Consequently, no key information document (KID) required by Regulation
(EU) No. 1286/2014 (the PRIIPs Regulation) for offering or selling the Preferred Securities or
otherwise making them available to retail investors in the EEA has been prepared and therefore
offering or selling the Preferred Securities or otherwise making them available to any retail investor
in the EEA may be unlawful under the PRIIPs Regulation.
Prohibition on marketing and sales to retail investors
The Preferred Securities are complex financial instruments and are not a suitable or appropriate
investment for all investors. In some jurisdictions, regulatory authorities have adopted or published
laws, regulations or guidance with respect to the offer or sale of securities such as the Preferred
Securities to retail investors. Each of the Managers has represented and agreed that offers of the
Preferred Securities in the EEA shall only be directed specifically at or made to professional investors
(clientes profesionales) as defined in point (10) of Article 4(1) of MiFID II.
In particular, in June 2015, the United Kingdom Financial Conduct Authority (the FCA) published
the Product Intervention (Contingent Convertible Instruments and Mutual Society Shares) Instrument
2015, which took effect from 1st October, 2015 (the PI Instrument). In addition, (i) on 1st January,
4

2018, the PRIIPs Regulation became directly applicable in all EEA member states and (ii) MiFID II
was required to be implemented in EEA member states by 3rd January, 2018. Together the PI
Instrument, the PRIIPs Regulation and MiFID II are referred to as the Regulations.
The Regulations set out various obligations in relation to (i) the manufacture and distribution of
financial instruments and (ii) the offering, sale and distribution of packaged retail and insurance-
based investment products and certain contingent write-down or convertible securities such as the
Preferred Securities.
Each of the Bank and the Managers are required to comply with some or all of the Regulations. By
purchasing, or making or accepting an offer to purchase, any Preferred Securities (or a beneficial
interest in such Preferred Securities) from the Bank and/or any Managers, each prospective investor
will be deemed to represent, warrant, agree with and undertake to the Bank and each of the Managers
that:
(a)
it is not a retail client (as defined in MiFID II);
(b)
whether or not it is subject to the Regulations, it will not:
(I)
sell or offer the Preferred Securities (or any beneficial interests therein) to any retail
clients (as defined in MiFID II); or
(II)
communicate (including the distribution of this Prospectus) or approve an invitation
or inducement to participate in, acquire or underwrite the Preferred Securities (or
any beneficial interests therein) where that invitation or inducement is addressed to
or disseminated in such a way that it is likely to be received by a retail client (in each
case within the meaning of MiFID II).
In selling or offering Preferred Securities or making or approving communications relating to
the Preferred Securities, it may not rely on the limited exemptions set out in the PI
Instrument; and
(c)
it will at all times comply with all applicable laws, regulations and regulatory guidance
(whether inside or outside the EEA) relating to the promotion, offering, distribution and/or
sale of the Preferred Securities (or any beneficial interests therein), including (without
limitation) MiFID II and any other applicable laws, regulations and regulatory guidance
relating to determining the appropriateness and/or suitability of an investment in the
Preferred Securities (or any beneficial interests therein) by investors in any relevant
jurisdiction.
Where acting as agent on behalf of a disclosed or undisclosed client when purchasing, or making or
accepting an offer to purchase, any Preferred Securities (or any beneficial interests therein) from the
Bank and/or the Managers, the foregoing representations, warranties, agreements and undertakings
will be given by and be binding upon both the agent and its underlying client.
Each prospective investor further acknowledges that:
(i)
the identified target market for the Preferred Securities (for the purposes of the product
governance obligations in MiFID II) is eligible counterparties and professional clients;
(ii)
the target market assessment indicates that the Preferred Securities are incompatible with the
needs, characteristic and objectives of clients which are retail clients (as defined in MiFID II)
and accordingly the Preferred Securities shall not be offered or sold to any retail clients; and
5

(iii)
no key information document (KID) under the PRIIPs Regulation has been prepared and
therefore offering or selling the Preferred Securities or otherwise making them available to
any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
Each potential investor should inform itself of, and comply with, any applicable laws, regulations or
regulatory guidance with respect to any resale of the Preferred Securities (or any beneficial interests
therein), including the Regulations.
Where acting as agent on behalf of a disclosed or undisclosed client when purchasing, or making or
accepting an offer to purchase, any Preferred Securities (or any beneficial interests therein) from the
Bank and/or the Managers the foregoing representations, warranties, agreements and undertakings
will be given by and be binding upon both the agent and its underlying client.
Product Classification Pursuant to Section 309B of the Securities and Futures Act (Chapter 289 Of
Singapore)
In connection with Section 309B of the Securities and Futures Act (Chapter 289) of Singapore and the
Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore (the CMP
Regulations 2018), the Bank has determined the classification of the Preferred Securities as
prescribed capital markets products (as defined in the CMP Regulations 2018) and Excluded
Investment Products (as defined in the Monetary Authority of Singapore (the MAS) Notice SFA 04-
N12: Notice on the Sale of Investment Products and the MAS Notice FAA-N16: Notice on
Recommendations on Investment Products).

6

CONTENTS
Overview of the Offering ................................................................................................................................... 8
Risk Factors ..................................................................................................................................................... 14
Documents Incorporated by Reference ............................................................................................................ 67
Capital Adequacy ............................................................................................................................................. 69
Description of Banco Bilbao Vizcaya Argentaria, S.A.................................................................................... 71
Conditions of the Preferred Securities ............................................................................................................. 92
Use of Proceeds.............................................................................................................................................. 135
Taxation ......................................................................................................................................................... 136
Subscription, Sale and Transfer ..................................................................................................................... 147
Additional Information .................................................................................................................................. 152
Signature ........................................................................................................................................................ 154
7

OVERVIEW OF THE OFFERING
The following is an overview (the Overview) of certain information relating to the offering of the
Preferred Securities, including the principal provisions of the terms and conditions thereof. This
Overview must be read as an introduction to this Prospectus and any decision to invest in the
Preferred Securities should be based on a consideration of this Prospectus as a whole, including
the documents incorporated by reference. This Overview is indicative only, does not purport to be
complete and is qualified in its entirety by the more detailed information appearing elsewhere in
this Prospectus. See, in particular, "Conditions of the Preferred Securities".
Words and expressions defined in "Conditions of the Preferred Securities" shall have the same
meanings in this Overview.

Bank:
Banco Bilbao Vizcaya Argentaria, S.A.
Risk Factors:
There are certain factors that may affect the Bank's
ability to fulfil its obligations under the Preferred
Securities. These are set out under "Risk Factors" and
include the Bank's exposure to adverse changes in
economic conditions in the countries where the Group
operates, the Spanish economy and the real estate
market and risks relating to increasingly onerous capital
requirements, the possible application of any Spanish
Bail-in Power to the Bank, the lack of availability of
funding,
volatility
in
interest
rates,
increased
competition and risks relating to cyber security. There
are also risks faced by the Bank in its Southern and
North American and Eurasian businesses. In addition,
there are certain factors which are material for the
purpose of assessing the market risks associated with the
Preferred Securities which are described in detail under
"Risk Factors".
Issue size:
1,000,000,000
Issue date:
24th September, 2018
Issue details:
Series 7 1,000,000,000 Non-Step-Up Non-Cumulative
Contingent Convertible Perpetual Preferred Tier 1
Securities of 200,000 Liquidation Preference each.
The Bank will request that the Preferred Securities
qualify as Tier 1 Capital of the Bank and the Group
pursuant to CRD IV and Applicable Banking
Regulations.
Liquidation Preference:
200,000 per Preferred Security.
Use of Proceeds:
The net proceeds from the issue of the Preferred
Securities will be used for the Group's general corporate
purposes, which include making a profit.
Distributions:
Distributions will accrue (i) in respect of the period
from (and including) the Closing Date to (but excluding)
the First Reset Date at the rate of 5.875 per cent. per
8

annum, and (ii) in respect of each Reset Period, at the
rate per annum equal to the aggregate of 5.66 per cent.
per annum and the 5-year Mid-Swap Rate for such
Reset Period, converted to a quarterly rate in accordance
with market convention. Subject as provided in the
Conditions (see "Limitations on Distributions" below),
such Distributions will be payable quarterly in arrear on
each Distribution Payment Date.
For further information, see Condition 4.
Limitations on Distributions:
The Bank may elect, in its sole and absolute discretion,
to cancel the payment of any Distribution in whole or in
part at any time and for any reason (or for no reason).
Payments of Distributions in any financial year of the
Bank shall be made only out of Distributable Items of
the Bank.
To the extent that (i) the Bank has insufficient
Distributable Items to make Distributions on the
Preferred Securities scheduled for payment in the then
current financial year and any interest payments or
distributions that have been paid or made or are
scheduled or required to be paid or made out of
Distributable Items of the Bank in the then current
financial year, in each case excluding any portion of
such payments already accounted for in determining the
Distributable Items of the Bank, and/or (ii) the
Regulator, in accordance with Article 68 of Law
10/2014 and/or Article 16 of the SSM Regulation and/or
Applicable Banking Regulations then in force, requires
the Bank to cancel the relevant Distribution in whole or
in part, then the Bank will, without prejudice to the right
above to cancel the payment of all such Distributions on
the Preferred Securities, make partial or, as the case may
be, no payment of the relevant Distribution on the
Preferred Securities.
No payments will be made on the Preferred Securities
(whether by way of a repayment of the Liquidation
Preference, the payment of any Distribution or
otherwise) if and to the extent that such payment would
cause a breach of any regulatory restriction or
prohibition on payments on Additional Tier 1
Instruments
pursuant
to
Applicable
Banking
Regulations (including, without limitation, any such
restriction or prohibition relating to any Maximum
Distributable Amount applicable to the Bank and/or the
Group).
Distributions on the Preferred Securities will be non-
cumulative. Accordingly, if any Distribution (or part
thereof) is not made on the relevant Distribution
Payment Date in respect of the Preferred Securities then
the right of the Holders to receive the relevant
Distribution (or part thereof) will be extinguished and
9

the Bank will have no obligation to pay such
Distribution (or part thereof), whether or not any future
Distributions on the Preferred Securities are paid.
Status of the Preferred Securities:
The Preferred Securities will constitute direct,
unconditional, unsecured and subordinated obligations
of the Bank and, in the case of insolvency (concurso de
acreedores) of the Bank, rank as set out in Condition 3.1
in accordance with Article 92.2º of the Insolvency Law
and Additional Provision 14.3 of Law 11/2015 but only
to the extent permitted by the Insolvency Law or any
other applicable laws relating to or affecting the
enforcement of creditors' rights in Spain and subject to
any other ranking that may apply as a result of any
mandatory provision of law.
For further information, see Condition 3.1.
Optional Redemption:
All, and not some only, of the Preferred Securities may
be redeemed at the option of the Bank, subject to the
prior consent of the Regulator (if required, and
otherwise in accordance with Applicable Banking
Regulations then in force), at any time on or after the
First Reset Date at the Redemption Price.
The Preferred Securities are also redeemable on or after
the Closing Date at the option of the Bank in whole but
not in part, at any time, at the Redemption Price in
accordance with Articles 77 and 78 of CRR, Article 29
of the Commission Delegated Regulation (EU)
241/2014 and/or any other Applicable Banking
Regulations in force at the relevant time if there is a
Capital Event or a Tax Event.
For further information, see Condition 7.
Substitution and Variation:
If a Capital Event or a Tax Event, as applicable, occurs
and is continuing, the Bank may substitute or modify the
terms of the Preferred Securities so that the Preferred
Securities once again become or remain Qualifying
Preferred Securities. See Condition 11.2.
Conversion:
In the event of the occurrence of the Trigger Event, the
Preferred Securities are mandatorily and irrevocably
convertible into newly issued Common Shares at the
Conversion Price.
In addition and subject as provided in Condition 7.6, in
the event of a Capital Reduction, the Preferred
Securities are mandatorily and irrevocably convertible
into Common Shares unless a Holder elects that the
Preferred Securities held by it shall not be so converted
by delivery to the Bank of a duly completed Election
Notice through the relevant Iberclear Member and in
accordance with the Iberclear procedures applicable
from time to time on or before the 10th Business Day
10