Banco Santander tenders for dollar fixed-to-floaters, European notes

By Susanna Moon

Chicago, March 6 - Banco Santander, SA said it began a cash tender offer for the outstanding fixed-to-floating callable subordinated notes due 2019 issued by Santander Issuances, SA Unipersonal.

Santander holds about $4.75 million of the total $257.5 million principal amount of the notes outstanding.

The tender offer will expire at 5 p.m. ET on March 13.

Santander will pay holders $102,000 per $100,000 principal amount of notes plus accrued interest to but excluding the settlement date of March 19.

The offer is being conducted as a part of the bank's "active management of liabilities and capital, and is focused on core capital generation as well as the optimization of the future interest expense," according to a company press release.

"The tender offer is also designed to provide liquidity in the market and to offer noteholders the possibility to exit their investment in the notes," the release added.

Lucid Issuer Services Ltd. (44 (0) 207 704-0880, attn: David Shilson / Paul Kamminga, or via e-mail at santander@lucid-is.com) is the information and tender agent.

BofA Merrill Lynch (attn.: liability management group, 888 292-0070 or collect 980 387-3907) and Santander (212 407-0995) are the dealer managers.

Euro, pound notes

Banco Santander, SA also began tender offers for €6,575,000,000 and £2,243,000,000 of notes issued in 15 series by various issuers belonging to Santander's Group, according to a separate press release.

The purchase price for the 15 series of notes issued by Santander Issuances, SA Unipersonal will be as follows:

• 88% of par for the €1.5 billion series 13 callable subordinated step-up floating-rate instruments due 2017;

• 87.5 for €550 million callable subordinated step-up floating-rate instruments due 2017;

• 88.5 for €1.5 billion callable subordinated step-up fixed-to-floating instruments due 2017;

• 85.5 for £300 million callable subordinated step-up fixed-to-floating instruments due 2018;

• 83 for €500 million callable subordinated step-up fixed-to-floating instruments due 2018;

• 84 for €500 million callable subordinated step-up fixed-to-floating instruments due 2019;

• 101 for €449.25 million callable subordinated step-up fixed-to-floating instruments due 2019;

• 103 for £843.35 million callable subordinated step-up fixed-to-floating instruments due 2019;

• 86 for £300 million callable subordinated step-up fixed-to-floating instruments due 2017;

• 89 for £800 million callable subordinated step-up fixed-to-floating instruments due 2017;

• 68 for €102 million subordinated floating-rate instruments due 2018;

• 65 for €585 million subordinated floating-rate instruments due 2019;

• 60 for €114 million subordinated floating-rate instruments due 2022;

• 60 for €25 million subordinated floating-rate instruments due 2022; and

• 75 for €750 million guaranteed perpetual step-up subordinated notes.

Funding for the offers will come from "ordinary available liquidity," the release noted.

Instructions for the European notes must be sent by 11 a.m. ET on March 13 to the tender and information agent, Lucid Issuer Services Ltd. (santander@lucid-is.com, or +44 (0) 207 704 0880, attn.: David Shilson / Paul Kamminga).

The dealer managers are Merrill Lynch International and Banco Santander, SA.

Banco Santander is a Madrid-based bank.

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