MADRID: Banco Santander, S.A. said Wednesday it has begun a cash tender offer to purchase up to $850 million of one series of its outstanding U.S. dollar-denominated Additional Tier 1 (AT1) securities.
The offer covers the bank’s 4.750% Non-Step-Up Non-Cumulative Contingent Convertible Perpetual Preferred Tier 1 Securities, with a principal amount outstanding of $1 billion. The securities carry a first optional redemption date of Nov. 12, 2026.
Santander said the move is aimed at managing its Tier 1 capital position and optimizing liquidity and debt maturity. Securities accepted in the offer will be cancelled and not reissued.
The purchase price has been set at 100.1% of the nominal amount, equal to $1,001 per $1,000 tendered, with securities only accepted in multiples of $200,000. Holders whose securities are validly tendered and accepted will also receive accrued distribution payments.
The offer commenced May 27 and will expire at 5 p.m. New York time on June 9, unless extended or terminated. Results are expected to be announced June 10, with settlement scheduled for June 11.
Santander said proceeds from a concurrent offering of new AT1 securities or available cash will be used to fund the tender consideration and related expenses. The new securities are intended to qualify as Additional Tier 1 capital under banking regulations.
The bank noted that acceptance of securities is at its sole discretion and may be subject to pro-ration if tenders exceed the maximum offer amount.
