On Monday night, Banco Comercial Português disclosed to the Portuguese Securities Market Commission the terms for issuing senior debt securities eligible for the MREL instrument.
The bank issued 500 million euros for six years with a fixed annual interest rate of 3.125% for the first five years.
“In the sixth year, the interest rate will result from the three-month Euribor plus a spread of 0.95%,” the bank stated, noting the possibility of early repayment at the end of the fifth year.
“The issuance was placed on the international market with a very diversified institutional investor base, mainly investment funds, banks, and pension funds,” the bank communicated to the market regulator.
Reports indicate the issuance was managed jointly by BCP, Goldman Sachs, IMI – Intesa Sanpaolo, JP Morgan, and Morgan Stanley.
At Banco Montepio, the newly announced issuance amounted to 350 million euros for four years, attracting a demand of 2.4 billion euros, “about seven times the issued amount.”
Banco Montepio’s issuance has a fixed annual coupon of 3.5% for the first three years with a possibility of early repayment before the fourth year.
“If the early repayment option is not exercised, the rate for the last year will be indexed to the three-month Euribor plus a spread of 1.48%,” added the mutual institution.
The Montepio operation is also eligible for MREL.
MREL (minimum requirement for own funds and eligible liabilities) is an instrument consisting of the minimum requirement of own funds and eligible debts.
This instrument has a minimum level set by the supervisor for each bank, intended to ensure a margin of capital and loss absorption in resolution cases.
Banco Montepio also indicated an ongoing liability management exercise for the early repurchase and redemption of bonds worth 200 million euros, maturing in October 2026.
This settlement by Banco Montepio is expected to occur on June 25.
