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Banco Santander to sell contingent convertible perpetual preferreds
By Mary-Katherine Stinson
Lexington, Ky., Nov. 16 – Banco Santander SA is selling non-step-up non-cumulative contingent convertible perpetual preferred tier 1 securities, with a liquidation preference of $200,000 each, in two tranches, according to a 424B5 filed with the Securities and Exchange Commission.
The offering consists of two dollar-denominated tranches. The first tranche will accrue non-cumulative cash distributions at a fixed rate until May 2029, the first reset date, and then at the reset date and every fifth anniversary after that at a fixed rate plus a margin over U.S. Treasuries. The second tranche will accrue non-cumulative cash distributions at a fixed rate until November 2033, the first reset date, and then at the reset date and every fifth anniversary after that at a fixed rate plus a margin over U.S. Treasuries.
The first tranche notes may be redeemed in whole on any day during the six-month period beginning in November 2028 through the first reset date and on any subsequent distribution payment date. The second tranche notes may be redeemed in whole on any day during the six-month period beginning in May 2033 through the first reset date and on any subsequent distribution payment date.
The notes will also be callable due to a capital event or a tax event.
Joint bookrunners for the dollar preferreds are BNP Paribas Securities Corp., BofA Securities, Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, RBC Capital Markets, LLC and Santander US Capital Markets LLC.
Davis Polk & Wardwell LLP is legal counsel for the issuer. Uria Menendez Abogados, SLP and Linklaters LLP will advise the underwriters.
Proceeds will be used for general corporate purposes, including managing potential refinancing of existing capital securities.
The banking services company is based in Madrid.
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