12. Available-for-sale financial assets

12.1 Balance details

The breakdown of the balance by the main financial instruments in the accompanying consolidated balance sheets is as follows:

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Available-for-Sale Financial Assets	Millions of Euros
	2013	2012	2011
Debt securities	71,861	63,651	49,549
Impairment losses	(55)	(103)	(133)
Subtotal	71,806	63,548	49,416
Equity instruments	6,111	4,188	5,658
Impairment losses	(143)	(236)	(433)
Subtotal	5,968	3,952	5,225
Total	77,774	67,500	54,641

The increase in this line item is mainly due to:

• On September 4, 2013 “Held to maturity investments” portfolio was reclassified to “Available for sale financial assets”. This reclassification is a result of a change in the business model used to manage these portfolios, which will not be considered a permanent investment and may be subject of sale.

The reclassified balance was €9,722 million with an unrealized gain due to the change in classification of approximately €25 million, registered in the equity line “Valuation adjustments – Financial assets available for sale”. The impact in interest margin during 2013 is not material.

• As mentioned in Note 3, under the new agreement with the CITIC Group, BBVA's stake in CNBC (Note 17), which was reduced to 9.9%, has been reclassified during the year 2013 to “Available for sale financial assets”.

12.2 Debt securities

The breakdown of the balance under the heading “Debt securities”, broken down by the nature of the financial instruments, is as follows:

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Debt Securities Available-for-Sale 2013	Millions of Euros
	Amortized Cost (*)	Unrealized Gains	Unrealized Losses	Fair Value
Domestic Debt Securities
Spanish Government and other government agency debt securities	30,688	781	(90)	31,379
Other debt securities	8,536	227	(25)	8,738
Issued by Central Banks	-	-	-	-
Issued by credit institutions	5,907	124	(4)	6,027
Issued by other institutions	2,629	103	(21)	2,711
Subtotal	39,224	1,008	(115)	40,116
Foreign Debt Securities
Mexico	10,433	328	(178)	10,583
Mexican Government and other government agency debt securities	9,028	281	(160)	9,150
Other debt securities	1,404	47	(19)	1,433
Issued by Central Banks	-	-	-	-
Issued by credit institutions	84	11	(2)	93
Issued by other institutions	1,320	36	(16)	1,340
The United States	5,962	58	(82)	5,937
Government securities	1,055	11	(11)	1,056
US Treasury and other US Government agencies	171	3	(4)	170
States and political subdivisions	884	8	(7)	885
Other debt securities	4,907	46	(72)	4,881
Issued by Central Banks	-	-	-	-
Issued by credit institutions	234	2	(2)	233
Issued by other institutions	4,674	44	(70)	4,648
Other countries	14,928	570	(329)	15,170
Other foreign governments and other government agency debt securities	7,128	333	(261)	7,199
Other debt securities	7,801	237	(67)	7,971
Issued by Central Banks	1,209	9	(10)	1,208
Issued by credit institutions	4,042	175	(51)	4,166
Issued by other institutions	2,550	54	(6)	2,597
Subtotal	31,323	956	(589)	31,690
Total	70,547	1,964	(704)	71,806

(*)The amortized cost includes portfolio gains/losses linked to insurance contracts in which the policyholder assumes the risk in case of redemption. Download Excel

Debt Securities Available-for-Sale 2012	Millions of Euros
	Amortized Cost (*)	Unrealized Gains	Unrealized Losses	Fair Value
Domestic Debt Securities
Spanish Government and other government agency debt securities	25,375	243	(857)	24,761
Other debt securities	9,580	145	(120)	9,605
Issued by Central Banks	-	-	-	-
Issued by credit institutions	7,868	71	(59)	7,880
Issued by other institutions	1,712	74	(61)	1,725
Subtotal	34,955	388	(977)	34,366
Foreign Debt Securities
Mexico	8,230	962	(1)	9,191
Mexican Government and other government agency debt securities	7,233	833	-	8,066
Other debt securities	997	129	(1)	1,125
Issued by Central Banks	-	-	-	-
Issued by credit institutions	333	56	(1)	388
Issued by other institutions	664	73	-	737
The United States	6,927	189	(88)	7,028
Government securities	713	21	(10)	724
US Treasury and other US Government agencies	228	1	(1)	228
States and political subdivisions	485	20	(9)	496
Other debt securities	6,214	168	(78)	6,304
Issued by Central Banks	-	-	-	-
Issued by credit institutions	150	11	(7)	154
Issued by other institutions	6,064	157	(71)	6,150
Other countries	13,054	469	(560)	12,963
Other foreign governments and other government agency debt securities	5,557	212	(374)	5,395
Other debt securities	7,497	257	(186)	7,568
Issued by Central Banks	1,158	2	(1)	1,159
Issued by credit institutions	4,642	209	(101)	4,750
Issued by other institutions	1,697	46	(84)	1,659
Subtotal	28,211	1,620	(649)	29,182
Total	63,166	2,008	(1,626)	63,548

(*) The amortized cost includes portfolio gains/losses linked to insurance contracts in which the policyholder assumes the risk in case of redemption. Download Excel

Debt Securities Available-for-Sale 2011	Millions of Euros
	Amortized Cost (*)	Unrealized Gains	Unrealized Losses	Fair Value
Domestic Debt Securities
Spanish Government and other government agency debt securities	20,531	58	(1,380)	19,209
Other debt securities	4,412	125	(299)	4,238
Issued by Central Banks	-	-	-	-
Issued by credit institutions	3,297	80	(247)	3,130
Issued by other institutions	1,115	45	(52)	1,108
Subtotal	24,943	183	(1,679)	23,447
Foreign Debt Securities
Mexico	4,799	175	-	4,974
Mexican Government and other government agency debt securities	4,727	163	-	4,890
Other debt securities	72	12	-	84
Issued by Central Banks	-	-	-	-
Issued by credit institutions	59	11	-	70
Issued by other institutions	14	1	-	15
The United States	7,332	242	(235)	7,339
Government securities	993	36	(12)	1,017
US Treasury and other US Government agencies	486	8	(12)	482
States and political subdivisions	507	28	-	535
Other debt securities	6,339	206	(223)	6,322
Issued by Central Banks	-	-	-	-
Issued by credit institutions	629	22	(36)	615
Issued by other institutions	5,710	184	(186)	5,708
Other countries	13,953	622	(919)	13,656
Other foreign governments and other government agency debt securities	8,235	344	(602)	7,977
Other debt securities	5,718	278	(317)	5,679
Issued by Central Banks	843	10	(0)	852
Issued by credit institutions	3,067	184	(265)	2,986
Issued by other institutions	1,808	84	(51)	1,841
Subtotal	26,084	1,039	(1,154)	25,969
Total	51,027	1,222	(2,833)	49,416

(*) The amortized cost includes portfolio gains/losses linked to insurance contracts in which the policyholder assumes the risk in case of redemption.

The credit ratings of the issuers of debt securities in the available-for-sale portfolio as of December 31, 2013, 2012 and 2011 are as follows:

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Available for Sale financial assets Debt Securities by Rating	December 2013		December 2012		December 2011
	Fair Value (Millions of Euros)	%	Fair Value (Millions of Euros)	%	Fair Value (Millions of Euros)	%
AAA	847	1.2%	1,436	2.3%	3,022	6.1%
AA+	4,927	6.9%	5,873	9.2%	5,742	11.6%
AA	198	0.3%	214	0.3%	1,242	2.5%
AA-	748	1.0%	1,690	2.7%	18,711	37.9%
A+	554	0.8%	741	1.2%	735	1.5%
A	8,463	11.8%	1,125	1.8%	2,320	4.7%
A-	4,588	6.4%	6,521	10.3%	948	1.9%
BBB+	7,203	10.0%	890	1.4%	7,631	15.4%
BBB	29,660	41.3%	3,314	5.2%	883	1.8%
BBB-	9,152	12.7%	28,466	44.8%	238	0.5%
BB+ or below	3,548	4.9%	7,706	12.1%	2,300	4.7%
Without rating	1,918	2.7%	5,572	8.8%	5,645	11.4%
Total	71,806	100.0%	63,548	100.0%	49,416	100.0%

12.3 Equity instruments

The breakdown of the balance under the heading "Equity instruments" as of December 31, 2013, 2012 and 2011, is as follows:

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Equity Instruments Available-for-Sale 2013	Millions of Euros
	Amortized Cost	Unrealized Gains	Unrealized Losses	Fair Value
Equity instruments listed
Listed Spanish company shares	3,270	54	(46)	3,277
Credit institutions	3	-	-	3
Other entities	3,267	54	(46)	3,275
Listed foreign company shares	2,030	46	(9)	2,066
United States	16	-	-	16
Mexico	8	37	-	45
Other countries	2,006	9	(9)	2,006
Subtotal	5,300	100	(55)	5,343
Unlisted equity instruments
Unlisted Spanish company shares	61	-	(1)	60
Credit institutions	3	-	-	3
Other entities	58	-	(1)	57
Unlisted foreign companies shares	554	9	(1)	563
United States	455	-	-	455
Mexico	-	-	-	-
Other countries	99	9	(1)	107
Subtotal	616	9	(2)	623
Total	5,916	109	(57)	5,968

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Equity Instruments Available-for-Sale 2012	Millions of Euros
	Amortized Cost	Unrealized Gains	Unrealized Losses	Fair Value
Equity instruments listed
Listed Spanish company shares	3,301	122	(380)	3,043
Credit institutions	2	-	-	2
Other entities	3,299	122	(380)	3,041
Listed foreign company shares	294	9	(44)	259
United States	32	1	(4)	29
Mexico	-	-	-	-
Other countries	262	8	(40)	230
Subtotal	3,595	131	(424)	3,302
Unlisted equity instruments
Unlisted Spanish company shares	77	2	(4)	75
Credit institutions	4	-	-	4
Other entities	73	2	(4)	71
Unlisted foreign companies shares	568	7	-	575
United States	474	-	-	474
Mexico	-	-	-	-
Other countries	94	7	-	101
Subtotal	645	9	(4)	650
Total	4,240	140	(428)	3,952

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Equity Instruments Available-for-Sale 2011	Millions of Euros
	Amortized Cost	Unrealized Gains	Unrealized Losses	Fair Value
Equity instruments listed
Listed Spanish company shares	3,803	468	(2)	4,269
Credit institutions	2	-	-	2
Other entities	3,801	468	(2)	4,267
Listed foreign company shares	359	5	(91)	273
United States	41	-	(12)	29
Mexico	-	-	-	-
Other countries	318	5	(79)	244
Subtotal	4,162	473	(93)	4,542
Unlisted equity instruments
Unlisted Spanish company shares	35	-	-	35
Credit institutions	1	-	-	1
Other entities	35	-	-	35
Unlisted foreign companies shares	635	13	-	648
United States	559	2	-	561
Mexico	1	-	-	1
Other countries	75	11	-	86
Subtotal	670	13	-	683
Total	4,832	486	(93)	5,225

12.4 Gains/losses

The changes in the gains/losses, net of taxes, recognized under the equity heading “Valuation adjustments – Available-for-sale financial assets” in the accompanying consolidated balance sheets are as follows:

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Changes in Valuation Adjustments - Available-for-Sale Financial Assets	Millions of Euros
	2013	2012	2011
Balance at the beginning	(238)	(628)	333
Valuation gains and losses	1,653	464	(1,281)
Income tax	(489)	(192)	231
Amounts transferred to income	(136)	118	89
Other reclassifications	61	-	-
Balance at the end	851	(238)	(628)
Of which:
Debt securities	780	(80)	(974)
Equity instruments	71	(158)	346

The losses recognized under the heading “Valuation adjustments – Available-for-sale financial assets” in the consolidated balance sheet for the year 2013 correspond mainly to debt securities from government agencies.

• As of December 31, 2013, 46.7% of the unrealized losses recognized under the heading "Valuation adjustments – Available-for-sale financial assets” and originating in debt securities were generated over more than twelve months. However, no impairment has been considered, as following an analysis of these unrealized losses it can be concluded that they were temporary due to the following reasons: the interest payment dates of all the fixed-income securities have been satisfied; and because there is no evidence that the issuer will not continue to meet its payment obligations, nor that future payments of both principal and interest will not be sufficient to recover the cost of the debt securities.
• As of December 31, 2013, the Group has analyzed the unrealized losses recognized under the heading “Valuation adjustments – Available-for-sale financial assets” resulting from equity instruments generated over a period of more than 12 months and with a fall of more 20% in their price, as a first approximation to the existence of possible impairment. As of 31 December, 2013, the unrealized losses recognized under the heading “Valuation adjustments – Available-for-sale financial assets” resulting from equity instruments generated over a period of more than 18 months or with a fall of more 40% in their price are not significant.

The losses recognized under the heading “Impairment losses on financial assets (net) – Available-for-sale financial assets” in the accompanying consolidated income statement amounted to €36, €41 million and €22 million for the year ended December 31, 2013, 2012 and 2011, respectively (see Note 49).