BBVA · Banco Bilbao Vizcaya Argentaria, S.A.

BBVA's issuance of $1 billion in contingently convertible preferred securities represents a strategic capital raise to bolster its Additional Tier 1 Capital under solvency regulations, enhancing the group's financial resilience. The fixed 7.125% distribution rate until 2033 provides predictable returns initially, transitioning to a floating rate tied to 5-year UST plus a 298.5 bps margin, aligning with market benchmarks post-initial period. Exclusion of pre-emptive rights streamlines the process for institutional investors, while the non-retail restriction and planned NYSE listing target sophisticated capital markets participants. The discretionary nature of distributions underscores the capital instrument's subordination and conversion features in stress scenarios, typical for AT1 securities. Issuance of required director and independent expert reports per Spanish law ensures transparency and shareholder access via BBVA's website upon expected May 8, 2026 closing, with presentation at the next General Shareholders' Meeting. This move signals proactive balance sheet management amid regulatory capital demands.