La Caixa to Sell 7.5% of CaixaBank to Raise EU1.5 Billion

Spain’s La Caixa banking group plans to sell a 7.5 percent stake in its listed lender CaixaBank (CABK) SA in a bid to raise 1.5 billion euros ($2 billion) to bolster capital.

La Caixa expects to raise about 900 million euros by selling about 4.88 percent of CaixaBank with the remaining sum of about 600 million euros coming from issuing four-year bonds exchangeable into shares in the bank, the Barcelona-based group said in a filing to regulators today. Depending on how the transactions go, the parent company expects to reduce its stake in CaixaBank to 56 percent.

The sale by La Caixa of a stake in CaixaBank will help boost its core capital ratio, now at 11.9 percent, to as much as about 12.8 percent, assuming all the bonds are exchanged, the company said. La Caixa, a former savings bank that transferred its banking business to CaixaBank, is trying to reduce its stake in the lender as the so-called cajas come under government pressure to diversify their assets.

The exchangeable bonds will carry a fixed annual coupon of from 0.625 percent to 1.375 percent, La Caixa said. La Caixa can opt to pay a combination of cash and CaixaBank shares to the investors when the bonds mature, it said.

Goldman Sachs Group Inc., Morgan Stanley and UBS AG are managing the sale as joint bookrunners, La Caixa said. Today’s transaction follows CaixaBank’s step earlier this week to raise 594 million euros by issuing bonds exchangeable for shares in oil company Repsol SA (REP) to bolster its capital.

To contact the reporter on this story: Charles Penty in Madrid at cpenty@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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