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Bankinter to issue 406 mln euro convertible bond

Source: Reuters - Tue 8th Mar 2011

Spain's smallest blue-chip bank, said on Tuesday it would boost its core capital ratio by issuing 406 million euros in convertible bonds.

Spanish banks are jostling to raise their capital reserves after demands from the government to have minimum levels of core capital, a measure of resilience to economic downturn, or face nationalisation.

Bankinter, which has one of the lowest capital levels amongst Spain's listed banks, said its core capital ratio would be 8.23% after the bond issue, above the government minimum of 8% for listed banks and up from its current level of 6.92%.

The bond will pay a coupon of 7%. Small domestic bank Banco Pastor said last week it would issue 252 million in convertible bonds with a coupon of 8.25%.

The Bank of Spain will publish lenders' capital needs on March 10. The government has set a minimum of 8% for listed banks and those more than 20 percent owned by private investors, and a 10% minimum for those who fail to attract private capital.

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