Banco popular is preparing to sell its first high-trigger CoCo, helping the lender to strengthen its capital base ahead of eurozone stress tests. The Spanish bank has hired Credit Agricole, Deutsche Bank, Goldman Sachs, Morgan Stanley and UBS to sell the euro-denominated perpetual non-call five-year bond, which will convert to equity if the bank's capital falls below 7%. Following investor meetings on Monday, the bond is expected to price on Tuesday at the earliest, and to be €500m-€750m in size. There has been a major recapitalisation of Europe's banks ahead of the ECB stress tests. That has seen them raise €35.5bn in equity, according to Morgan Stanley, to ensure their balance sheets are robust enough to withstand another crisis. Banks have also made the most of strong market conditions to issue nearly €24bn of AT1 bonds, beefing up their capital levels and improving their leverage ratios.
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