Scope has rated at A with Stable Outlook BBVA SA’s EUR 1.5bn 0.75% non-preferred senior (NPS) notes issued today and due September 2022. This is BBVA’s first NPS debt issue. Scope’s Issuer Rating for BBVA is A+. The agency also rates the Spanish group’s senior unsecured debt not intended for MREL at A+.

These notes are being issued following the recent passage of the Decree Law 11/2017 which introduces the possibility for Spanish banks to issue MREL-eligible NPS debt. In resolution-related bail-in situations, this new class of senior unsecured liabilities ranks below the banks’ senior unsecured liabilities – deposits, derivatives and other financial contracts as well as ‘preferred’ senior unsecured debt – but above subordinated debt and capital securities.

Last July, following the passage of the Decree Law, Scope upgraded by one notch, to A+ from A, the rating of BBVA’s senior unsecured debt not intended for MREL – thus aligning it with the Spanish bank’s A+ Issuer Rating.

All these ratings have a Stable Outlook.

Legal and regulatory disclosures

Important information
Information pursuant to Regulation (EC) No 1060/2009 on credit rating agencies, as amended by Regulations (EU) No. 513/2011 and (EU) No. 462/2013

Responsibility
This report is issued by Scope Ratings AG, Berlin, District Court for Berlin (Charlottenburg) HRB 161306 B, Executive Board: Torsten Hinrichs (CEO), Dr Stefan Bund.
The rating analysis was prepared by Marco Troiano, Executive Director. Responsible for approving the rating action: Sam Theodore, Managing Director.

Rating history
Senior unsecured debt issued by Banco Bilbao Vizcaya Argentaria SA were first rated on 2 April 2014 and last updated on 25 July 2017.
The rating outlook indicates the most likely direction of the rating if the rating were to change within the next 12 to 18 months. A rating change is, however, not automatically ensured.
The rating was not requested by the issuer (unsolicited rating) but was prepared with the participation of the issuer.

Key sources of information for the rating
Key sources: Prospectus; website of the rated entity/issuer; annual reports/semi-annual reports of the rated entity/issuer, The following substantially material sources of information were used to prepare the credit rating: public domain, the rated entity, and Scope internal sources.
Scope Ratings considers the quality of the available information on the evaluated company to be satisfactory. Scope uses information and data that it considers to be accurate and reliable. Scope cannot, however, independently verify the reliability and accuracy of such information and data.

Examination of the rating by the rated entity prior to publication
Prior to publication, the rated entities were given the opportunity to examine the rating and the rating drivers, including the principal grounds on which the credit rating or rating outlook is based. The rated entity was subsequently provided with at least one full working day, to point out any factual errors, or to appeal the rating decision and deliver additional material information. Following that examination, the ratings were not modified.

Methodology
The methodology applicable for these rating actions “Bank Rating Methodology” (May 2017) is available on www.scoperatings.com. The historical default rates of Scope Ratings can be viewed on the central platform (CEREP) of the European Securities and Markets Authority (ESMA): http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. A comprehensive clarification of Scope’s default rating, definitions of rating notations and further information on the analysis components of a rating can be found on www.scoperatings.com.

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