JPMorgan Chase & Co. (JPM) sold $5.12 million of two-year notes that yield five times Banco Bilbao Vizcaya Argentaria SA (BBVA)’s gains, the first offering linked to the lender since at least January 2010.
The securities, issued Oct. 8, pay a maximum of 40 percent with all capital at risk, according to a prospectus filed with the U.S. Securities and Exchange Commission. JPMorgan valued the notes at 95 cents on the dollar.
Justin Perras, a spokesman for JPMorgan in New York, declined to comment on the offering.
BBVA, Spain’s second-biggest bank, issued $1.5 billion of contingent convertible bonds in April, the first European bank to sell the securities complying with new rules governing how they can be employed to bolster balance sheets. The bank is using the proceeds for its Tier 1 capital, the riskiest segment. The bonds automatically convert to stock if the bank’s Tier 1 ratio falls below 5.125 percent of assets weighted by risk.
The Bilbao-based bank rose 28 percent this year to 8.94 euros ($12.14) at the close of trading in Madrid today.
Bloomberg started collecting comprehensive data on U.S. SEC-registered structured notes in 2010.
Banks create the securities by packaging debt with derivatives to offer customized bets to retail investors while earning fees and raising money. Derivatives are contracts whose value is derived from stocks, bonds, commodities and currencies, or events such as changes in interest rates or the weather.
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