Issue of Equity

Banco Bilbao Vizcaya Argentaria SA 27 November 2006 DISCLOSURE OF RELEVANT EVENT BBVA reports that its board of directors, 24th November 2006, in exercise of the authority conferred by the Annual General Meeting of 28th February 2004, has resolved to increase BBVA's share capital by a nominal amount of €81,350,304.21, issuing and putting into circulation 166,021,029 ordinary shares of €0.49 nominal value each, from the same class and series as existing BBVA shares, and to be represented in book entries. Capital Increase: Purpose. This capital increase aims to raise approximately €3 bn with the purpose of reinforcing BBVA's equity structure in such a way as to achieve the Group's forecast growth whilst maintaining capital adequacy suitable for its volume of business and position in the market. Accelerated bookbuilding procedure. The capital issue shall be carried out by private placement amongst qualified institutional investors (the 'Investors') using the accelerated bookbuilding procedure, which will be implemented as follows: (a) The demand prospecting (bookbuilding) period, during which proposals will be formulated by the Investors to subscribe to the shares will begin today, 27th November 2006. Its maximum duration will be two working days, although the issuer may bring forward the deadline at its discretion. (b) Once the bookbuilding period has concluded, the bid price will be determined and subscription proposals shortlisted, after which the shortlisted subscription proposals will be confirmed and the shares definitively allocated to investors. (c) Once the shares are allocated, the bookrunners will subscribe and pay them up in their own name but to the account of the final Investors. Afterwards, the public capital increase deed will be granted and filed with the Vizcaya Company Registry, and IBERCLEAR will allocate the registry references for the shares to the bookrunners. Once the new shares are officially listed, the special stock-exchange transaction will transfer the shares to the final Investors. (d) Finally, the special stock-exchange transaction will be settled and the corresponding money be paid up by the final investors. BBVA will duly inform the market of the progress of the capital increase by filing the corresponding relevant events. The dates given above may be altered in view of events. In order to ensure the most suitable, efficient placement of its shares, BBVA has signed a placement agreement with Merrill Lynch International and Morgan Stanley & Co. International ltd. (the 'Bookrunner Banks') who, along with BBVA, will disseminate and promote the offering exclusively amongst qualified institutional investors. At the end of the private placement period, once existing demand is known through the bookbuilding process, the price will be determined. Issue price - Pricing procedure The shares will be issued at their nominal value of €0.49 each, plus the issue premium determined under the terms and conditions set out below. The issue price will be established with the help of the Bookrunner Banks specialising in equity distribution and with proven expertise in this type of operation. In this manner, once this Relevant Event has been disseminated, the Bookrunner Banks selected will intensively market the offering exclusively amongst qualified investors that are able to rapidly assess the offering and determine the amount and the price that they would be willing to pay. In an accelerated increase, the issue price of the new shares will be established according to the outcome of the bookbuilding process that the Bookrunner Banks carry out on behalf of the issuer. Once the placement price is established by the bookbuilding process, the final terms and conditions of the capital increase will be specified and, in particular, the issue price for the new shares, the number of shares to be issued, and exactly when the increase will be executed. Pursuant to article 159 of the Companies Act, an independent auditor designated by the Vizcaya Company Registry has issued the necessary report, concluding that the minimum issue price corresponds with the fair value of the Bank's shares. Minimum Price In accordance with the procedure described for accelerated capital increases, the final price will necessarily be determined at the end of the process and following the resolution to issue capital adopted by the board of directors, 24th November 2006. Consequently, as is habitual in this type of operation, the BBVA board of directors has resolved to establish a minimum issue price below which the capital increase may not be put into effect. The minimum price has been established at €18.07 per share. This minimum price has been determined in view of the closing market price of the BBVA share the day prior to the board of directors' resolution, ie, the closing price from 23rd November 2006, and in view of the analysis of past data following the habitual methodology used by the market to estimate the value at risk in a financial investment (VaR). The fairness of this minimum price has been confirmed by the obligatory report from an accounts auditor other than the auditor of the Company's books, designated for such purpose by the Company Registry. In the case the shares are issued at this minimum price, the amount of 3 bn of capital increase mentioned above would be reached with an issue of 166,021,029 shares, which in turn would correspond to approximately 4.9% of BBVA's issued capital. Incomplete subscription The resolution expressly envisages the possibility of incomplete subscription to the capital increase or even its non-execution. Disbursement of shares Under the structure described, the capital increase and the new BBVA shares will be paid up in cash. To expedite the listing of the new shares, they shall initially be subscribed and fully paid up by the bookrunner banks that will act in their own name and to the account of third parties, to immediately pass them on to the institutional investors that have confirmed their call orders over the shares. Offering targets - Exclusion of preemptive subscription rights The shares shall be exclusively targeted at qualified investors, as defined under article 39 of Royal Decree 1310/2005, residing either inside or outside Spain, principally those described in its paragraph one, ie, targets shall be legally-recognised entities authorised or regulated to operate on financial markets, including financial institutions, investment service enterprises, other authorised or regulated financial entities, insurance companies, collective investment institutions and their management companies, pension funds and their management companies, authorised commodity derivative brokers, and entities whose sole activity is securities investment even if not authorised or regulated. This issue shall, consequently, not be a public offering on any securities market. On grounds of corporate interest, it has been resolved to suppress the preemptive subscription right, since this is necessary in order to use the mechanism described aimed at raising funds at the most favourable price possible, minimising the financial risks of the operation and taking advantage of the best conditions on the financial markets. To such end, the board of directors has approved its corresponding directors' report which will be duly disclosed to the shareholders for the Company's next General Meeting. Additionally, according to applicable regulations, the issue price of the shares must correspond to their fair value. In order to determine the fair value of the shares to be issued, the Vizcaya Company Registry was requested to designate an accounts auditor, other than the auditor of the Bank's accounts, pursuant to article 159.1.c) of the Company Act. The Vizcaya Company Registry has named Ernst & Young as auditor other than the auditor of the Bank's accounts. Ernst & Young has accepted the commission and has issued its report, under its own liability, confirming the above. BBVA has drawn up the obligatory directors' report, which, along with the report from the accounts auditor designated by the Company Registry, pursuant to article 159.2 will be made available to the shareholders and communicated at the next General Meeting to be held. Rights of the new shares The newly issued shares shall be ordinary shares, the same as those currently in circulation. They shall be represented by book entries to be recorded by Sociedad de Gestion de los Sistemas de Registro, Compensacion y Liquidacion de Valores, S.A. (Iberclear) and its partner companies. The new shares shall entitle their holders to their part of any corporate earnings paid out after the date on which they are recorded in the Iberclear books and included in total net worth after settlement. BBVA has requested CNMV, pursuant to article 33 of the Securities Market Act, that in order to ensure suitable dissemination of this information, it suspend trading of BBVA shares during the period of time it deems prudent. Secondary organised markets where the shares are listed. Request for official listing BBVA shares are listed on the securities exchanges in Madrid, Barcelona, Bilbao and Valencia through the round-the-clock linked-exchange trading system (Sistema de Interconexion Bursatil, Mercado Continuo) and on the exchanges in Frankfurt, London, Milan, Mexico and Zurich and, as ADS's, on the New York Stock Exchange. BBVA will request official listing of the new BBVA shares to be issued by virtue of the capital increase on the securities exchanges in Madrid, Barcelona, Bilbao and Valencia, so that they be traded through the round-the-clock linked-exchange trading system (Sistema de Interconexion Bursatil, Mercado Continuo). Today, at 10:00 a.m. (Madrid time) the transaction shall be presented to analysts and investors. There will be a live webcast of the presentation which may be accessed from BBVA's corporate site (www.bbva.com) and which will be available for replay at BBVA's corporate web during at least the following month. November 2006, 27th Press Release 27 Nov 2006 BBVA €3.0bn capital increase O The purpose of the transaction is to raise BBVA's core capital ratio above 6%, after the acquisitions made by the Group since 2004, and to fund its strong organic growth BBVA has informed the CNMV today that it will increase capital by €3bn. The transaction will be executed through an accelerated bookbuilt placement directed to qualified institutional investors only. The objective of the capital increase approved by the Board of Directors of BBVA last Friday November 24th is intended to raise core capital above 6%, in accordance with BBVA's stated capital management policy. As a result of the capital increase, BBVA will be able to fund its future organic growth, whilst maintaining its solvency ratios, volume of activity and market position. The pricing of the transaction will be determined after a bookbuilding process, which will be executed over two days, subject to acceleration. In order to waive shareholder pre-emption rights, Spanish regulation requires a minimum issue price to be established by the Board of Directors of BBVA, below which the shares cannot be legally issued. This minimum issue price has been set at €18.07. The Joint Global Coordinators are BBVA, Merrill Lynch and Morgan Stanley. The Joint Bookrunners are Merrill Lynch and Morgan Stanley, and BBVA will act as co-Bookrunner. €4.6bn in acquisitions The last capital increase executed by BBVA took place in February 2004, to fund the purchase of the BBVA Bancomer minorities. In the last two and a half years, BBVA has made, among others, the acquisitions of Hipotecaria Nacional in Mexico, Granahorrar in Colombia, and Forum in Chile. It has also acquired Laredo National Bancshares, Texas Regional Bancshares and State National Bancshares as part of its expansion plan in the US. BBVA has just announced the agreement to acquire a 5% stake in China CITIC Bank (CNCB) and a 15% stake in CITIC International Financial Holdings (CIFH). In aggregate, these acquisitions amount to a total of €4.6bn. Such acquisitions reinforce the Group's organic growth, and have not required any capital increase until now. This information is provided by RNS The company news service from the London Stock Exchange
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