Abbey National Treasury wraps, prices one-week tender for three notes

By Susanna Moon

Chicago, May 13 – Abbey National Treasury Services plc said it priced the tender offers for three series of notes guaranteed by Santander UK plc.

The one-week tender ran from May 5 until 11 a.m. ET on May 12, with settlement expected to follow May 17.

Investors had tendered the following amounts, with pricing set at 6 a.m. ET on May 13 using a benchmark rate or reference security plus a tender spread, according to a company update:

• €707,344,000 of the €1.5 billion (€1,484,448,000 outstanding) of 1.125% notes due 2022 with pricing at 101.969% of par using the interpolated mid-swap rate plus 70 basis points for a benchmark rate of 0.068% and a tender yield of 0.768%;

• €358,943,000 of the €1 billion of 1.125% notes due 2025 with pricing at 99.508% based on the interpolated mid-swap rate plus 77 bps for a benchmark rate of 0.414% and a tender yield of 1.184%; and

• £147,602,000 of the £500 million 3.875% notes due 2029 with pricing at 109.683% based on the 6% U.K. Treasury Gilt due 2028 plus 140 bps for a benchmark rate of 1.565% and a tender yield of 2.987%.

After the repurchase, there will be left outstanding €777,104,000 of the 1.125% notes due 2022, €641,057,000 of the 1.125% notes due 2025 and £352,398,000 of the 3.875% notes.

The issuer also will pay accrued interest.

The tender offers were being made as part of the Santander UK Group’s “ongoing liability management, with the intention of supporting the transition to a holding company capital and term funding model in line with regulatory requirements,” according to a previous announcement.

Santander UK Group said it plans “to manage its overall liability composition and mix for value.”

Aside from the tender, and as part of Santander’s transition to a holding company capital and term funding model, Santander UK plc and the issuer plan to continue issuing senior liabilities in all major currency markets, with the issue possible in the “near future.”

The tender offers were not conditioned on any capital markets issue, the company noted.

Notes purchased in the tender offers will be canceled.

Banco Santander, SA (+ 44 20 7756 6909/ +44 20 7756 6646 or tommaso.grospietro@santandergcb.com/ King.Cheung@santandergcb.com) and UBS Ltd. (+44 20 7568 2133 or ol-liabilitymanagement-eu@ubs.com) are the dealer managers. Lucid Issuer Services Ltd. (Paul Kamminga, +44 20 7704 0880 or santander@lucid-is.com) is the tender agent.

Abbey is a London-based financial services company.

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