By Rebecca Melvin
New York, May 9 - Banco Santander SA priced $1.5 billion of perpetual convertible preferred shares to yield 6.375% for the first five years, with the rate reviewed after that by applying a margin of 478.8 basis points on the five-year mid-swap rate, according to a news release.
The Regulation S convertible deal is significantly smaller than the amount initially talked, which was for a preferred offering of up to $2.5 billion.
The bank seeks to use the convertible preferreds as additional Tier 1 capital under European regulations.
The preferreds are callable under certain circumstances and may be converted if the common equity Tier 1 ratio of the bank falls below 5.125%.
Application is being made to list the convertible preferred shares on the Irish Stock Exchange.
Banco Santander is the euro zone's largest bank in terms of market capitalization. It is based in Santander, Spain.
| Issuer: | Banco Santander SA
|
| Issue: | Convertible perpetual preferred stock
|
| Amount: | $1.5 billion
|
| Maturity: | Perpetual
|
| Dividend: | 6.375% for the first five years, then 478.8 bps over five-year mid-swap rate
|
| Provisional call: | In certain circumstances and if common equity Tier 1 ratio falls below 5.125%
|
| Distribution: | Regulation S
|
| Pricing date: | May 8
|
| Common stock symbol: | Madrid: SAN
|
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