Moody’s sobre Bankia: la decisión del TS, muy positiva para los tenedores de bonos Bankia

Redacción - Lunes, 08 de Febrero

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Court Excludes Bankia’s Institutional Investors from IPO Ruling, a Credit Positive 

From Credit Outlook Last Wednesday, the Supreme Court of Spain published a ruling on two cases of compensation claims initiated by retail investors who demanded the return of money they invested in Bankia S.A.’s (Ba3/B1 stable, b21) initial public offering in 2011. The ruling obliges the bank to pay back retail investors but makes a distinction with institutional investors. Excluding institutional investors from the court ruling is credit positive for bondholders because it eliminates the need for provisions that would negatively affect Bankia’s solvency.

Civil lawsuits seeking compensation for share purchases alleged that Bankia’s IPO prospectus did not accurately reflect its financial situation, leading to a distorted opinion about the bank’s solvency. The Supreme Court’s decision ruled that Bankia should compensate retail investors on the ground that mis-selling resulted from substantial inaccuracies of the prospectus. However, the ruling makes a distinction with institutional investors who, according to the Court, had access to various types of financial information other than prospectus in order to take an investment decision.

If institutional investors were also compensated, Bankia would have to create additional provisions to cover the IPO’s approximately €1.2 billion institutional tranche. At end of 2015, Bankia had €1.84 billion in provisions allocated to cover claims related to the retail tranche of the IPO.

Bankia, a commercial bank created from the merger of seven savings banks led by Caja Madrid and Bancaja, was listed on the stock exchange in July 2011. The IPO raised more than €3 billion in equity, out of which €1.8 was raised from sales to retail customers. In 2012 owing to mounting asset quality problems, Bankia had to be bailed-out by the Spanish government, subsequently reporting a €19.2 billion loss for 2012, which brought down the share price and wiped out the investments of the shareholders. 

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