REG - Banco Santander S.A. - Invitation to buy outstanding preferred securities

Banco Santander SAAnnouncement

08/05/2024 07:00

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RNS Number : 5086N  Banco Santander S.A.  07 May 2024

Banco Santander, S.A., ("Santander" or the "Offeror") in accordance with the
provisions of the securities market legislation, communicates the following:

OTHER RELEVANT INFORMATION

Further to our notice of inside information on 7 May 2024 (registered under
number 2235) announcing the invitation by Santander to holders of its
outstanding €1,500,000,000 4.75 per cent. Non-Step-Up Non-Cumulative
Contingent Convertible Perpetual Preferred Tier 1 Securities (ISIN:
XS1793250041) (the "Preferred Securities") to tender their Preferred
Securities for purchase by the Offeror for cash in an aggregate nominal amount
of up to the Maximum Acceptance Amount (the "Offer") and the intention to
issue a new series of contingent convertible perpetual preferred securities
(the "New Preferred Securities"), Santander announces today that it has set
(i) the final terms and conditions of the New Preferred Securities, which
aggregate nominal amount will amount to €1,500,000,000, and (ii) the Maximum
Acceptance Amount in respect of the Offer in €1,500,000,000 in aggregate
nominal amount of Preferred Securities.

The remuneration of the New Preferred Securities, the payment of which is
subject to certain conditions and discretionary, has been set at 7.00 per
cent. on an annual basis for the first 6 years (20 May 2030), and it will be
reviewed every five years thereafter by applying a margin of 443.2 basis
points on the applicable 5-year Mid-Swap Rate. Once issued, the New Preferred
Securities will be eligible as additional tier 1 capital of Santander. The New
Preferred Securities are perpetual, but they may be called under certain
circumstances and would be converted into newly issued ordinary shares of
Santander if the common equity tier 1 (CET1) ratio of Santander or its
consolidated group were to fall below 5.125%. As of 31 March 2024, the
consolidated CET1 ratio of Santander was 12.3%.

Likewise, Santander announces that it will request the admission to listing of
the New Preferred Securities on the Global Exchange Market of Euronext Dublin;
and that, as of today, the report of the directors of Santander concerning the
basis and rules for the conversion of the New Preferred Securities and the
exclusion of pre-emptive subscription rights will be available on Santander's
website (www.santander.com). The aforementioned report will also be provided
to the shareholders at the first general shareholders' meeting to be held.

With regard to the Offer, the Offeror reserves the right, in its sole and
absolute discretion and for any reason, to decrease the Maximum Acceptance
Amount. The Offeror will announce the final Acceptance Amount together with
the results of the Offer.

The Offer commenced on 7 May 2024 and will expire at 5.00 p.m. (CET) on 15 May
2024. Settlement is expected to take place on 20 May 2024, on the same date as
the settlement of the issue of New Preferred Securities.

The Offer is being made on the terms and subject to the conditions (including
the New Financing Condition) contained in the Tender Offer Memorandum and
should be read in conjunction with the Tender Offer Memorandum. Capitalised
terms used but not otherwise defined in this announcement shall have the
meaning given to them in the Tender Offer Memorandum.

Banco Santander, S.A and Santander US Capital Markets LLC are acting as Dealer
Managers for the Offer and Kroll Issuer Services Limited is acting as Tender
Agent. For detailed terms of the Offer please refer to the Tender Offer
Memorandum which (subject to offer and distribution restrictions) can be
obtained from the Dealer Managers and the Tender Agent referred to below.

 

 DEALER MANAGERS
 Banco Santander, S.A.                           Santander US Capital Markets LLC
 Ciudad Grupo Santander                          437 Madison Avenue, 10th Floor

Avenida de Cantabria s/n
New York, New York 10022

28660
United States

Madrid, Spain
Tel (U.S. Toll Free): +1 (855) 404-3636
 Attn: Liability Management
Tel (collect): +1 (212) 350-0660

Email: liabilitymanagement@gruposantander.com
Attn: Liability Management Team

Email: AmericasLM@santander.us
 THE TENDER AGENT

Kroll Issuer Services Limited
 The Shard

32 London Bridge Street

London SE1 9SG

United Kingdom

Tel: +44 20 7704 0880
 Attn: Alessandro Zorza

Email: santander@is.kroll.com

Website: https://deals.is.kroll.com/santander

Boadilla del Monte (Madrid), 7 May 2024

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO OR TO ANY PERSON
LOCATED OR RESIDENT IN ANY JURISDICTION WHERE OR TO WHOM IT IS UNLAWFUL TO
RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT.

 

 

DISCLAIMER

This announcement must be read in conjunction with the Tender Offer
Memorandum. This announcement and the Tender Offer Memorandum contain
important information which should be read carefully before any decision is
made with respect to the Offer. If any Qualifying Holder is in any doubt as to
the contents of this announcement, the Tender Offer Memorandum or the action
it should take, it is recommended to seek its own financial, legal, regulatory
and tax advice, including in respect of any tax consequences, immediately from
its broker, bank manager, solicitor, accountant or other independent
financial, tax or legal adviser.

None of the Offeror, the Dealer Managers or the Tender Agent or any of their
respective directors, employees, officers, agents or affiliates expresses any
opinion about the merits of the Offer or makes any recommendation as to
whether or not any Qualifying Holder should Offer to Sell its Preferred
Securities and no one has been authorised by the Offeror, the Dealer Managers
or the Tender Agent to make any such recommendation.

OFFER RESTRICTIONS

United Kingdom

The communication of the Tender Offer Memorandum and any other documents or
materials relating to the Offer is not being made and such documents and/or
materials have not been approved by an authorised person for the purposes of
section 21 of the Financial Services and Markets Act 2000. Accordingly, such
documents and/or materials are not being distributed to, and must not be
passed on to, the general public in the United Kingdom. The communication of
such documents and/or materials as a financial promotion is only being made
to, and may only be acted upon by, those persons in the United Kingdom falling
within the definition of investment professionals (as defined in Article 19(5)
of the Financial Services and Markets Act 2000 (Financial Promotion) Order
2005, as amended (the "Financial Promotion Order")) or persons who are within
Article 43 of the Financial Promotion Order or any other persons to whom it
may otherwise lawfully be made under the Financial Promotion Order.

France

The Tender Offer Memorandum and any documents or offering materials relating
to the Offer may not be distributed in the Republic of France except to
qualified investors (investisseurs qualifiés) as defined in Article 2(e) of
the Prospectus Regulation, as amended, and Article L.411-2 of the French Code
monétaire et financier as amended from time to time. The Tender Offer
Memorandum has not been and will not be submitted for clearance to nor
approved by the Autorité des marchés financiers.

Republic of Italy

None of the Offer, the Tender Offer Memorandum or any other documents or
materials relating to the Offer has been or will be submitted to the clearance
procedures of the Commissione Nazionale per le Società e la Borsa ("CONSOB")
pursuant to Italian laws and regulations. The Offer is being carried out in
the Republic of Italy ("Italy") as an exempted offer pursuant to article
101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998,
as amended (the "Financial Services Act") and article 35-bis, paragraph 4 of
CONSOB Regulation No. 11971 of 14 May 1999, as amended. Holders or beneficial
owners of the Preferred Securities that are located in Italy may tender their
Preferred Securities in the Offer through authorised persons (such as
investment firms, banks or financial intermediaries permitted to conduct such
activities in Italy in accordance with the Financial Services Act, CONSOB
Regulation No. 20307 of 15 February 2018, as amended from time to time, and
Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance
with applicable laws and regulations or with requirements imposed by CONSOB or
any other Italian authority.

Each intermediary must comply with the applicable laws and regulations
concerning information duties vis-à-vis its clients in connection with the
Preferred Securities and/or the Offer.

Spain

Neither the Offer nor the Tender Offer Memorandum constitute an offer of
securities or the solicitation of an offer of securities in Spain which
require the approval and the publication of a prospectus under Regulation (EU)
2017/1129, Spanish Law 6/2023, of 17 March, on the Securities Markets and the
Investment Services (Ley 6/2023, de 17 de marzo, de los Mercados de Valores y
de los Servicios de Inversión), as amended from time to time, and its
ancillary and related regulations. Accordingly, the Tender Offer Memorandum
has not been and will not be submitted for approval nor approved by the CNMV.

General

The Tender Offer Memorandum does not constitute an offer to buy or the
solicitation of an offer to sell Preferred Securities, and tenders of
Preferred Securities for purchase pursuant to the Offer will not be accepted
from Holders, in any circumstances in which such offer or solicitation is
unlawful.

Each holder of Preferred Securities participating in the Offer will also be
deemed to give certain representations and warranties in respect of the
jurisdictions referred to above and generally as set out in "Procedures for
submitting Offers to Sell - Representations, warranties and undertakings by
the Holders and Direct Participants" of the Tender Offer Memorandum. Any Offer
to Sell Preferred Securities pursuant to the Offer from a Holder or its Direct
Participant that is unable to make these representations and warranties will
not be accepted. Each of the Offeror, the Dealer Managers and the Tender Agent
reserves the right, in its absolute discretion, to investigate, in relation to
any Offer to Sell Preferred Securities, whether any such representation and
warranty given by a Holder is correct and, if such investigation is undertaken
and as a result the Offeror, the Dealer Managers or the Tender Agent
determines (for any reason) that such representation and warranty is not
correct, such Offer to Sell shall not be accepted.

NEW PREFERRED SECURITIES

The offering of the New Preferred Securities may be restricted by law in
certain jurisdictions and therefore persons into whose possession this
announcement comes should inform themselves about and observe any such
restrictions. Any failure to comply with these restrictions could result in a
violation of the laws of any such jurisdiction.

PROHIBITION ON MARKETING AND SALES TO RETAIL INVESTORS: The New Preferred
Securities are complex financial instruments with high risk and are not a
suitable or appropriate investment for all investors. Each of the joint lead
managers participating in the issue of the New Preferred Securities (the
"Joint Lead Managers") has represented and agreed that the offers of the New
Preferred Securities in the European Economic Area ("EEA") and in the United
Kingdom ("UK") shall only be made to eligible counterparties and professional
clients, each as defined in Directive 2014/65/EU on markets in financial
instruments (as amended, "MiFID II") or the FCA Handbook Conduct of Business
Sourcebook ("COBS"). Additionally, in some jurisdictions, regulatory
authorities have adopted or published laws, regulations or guidance with
respect to the offer or sale of securities such as the New Preferred
Securities. Potential investors in the New Preferred Securities should inform
themselves of, and comply with, any applicable laws, regulations or regulatory
guidance with respect to any resale of the New Preferred Securities (or any
beneficial interests therein).

Investors in Hong Kong should not purchase the New Preferred Securities in the
primary or secondary markets unless they are professional investors (as
defined in the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong)
and its subsidiary legislation, "Professional Investors") only and understand
the risks involved. The New Preferred Securities are generally not suitable
for retail investors.

PROHIBITION OF SALES TO EEA RETAIL INVESTORS - The New Preferred Securities
are not intended to be offered, sold or otherwise made available to and should
not be offered, sold or otherwise made available to any retail investor in the
EEA. For these purposes, a retail investor means a person who is one (or more)
of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II;
or (ii) a customer within the meaning of Directive (EU) 2016/97 (the
"Insurance Distribution Directive"), where that customer would not qualify as
a professional client as defined in point (10) of Article 4(1) of MiFID II; or
(iii) not a qualified investor as defined in the Prospectus Regulation.
Consequently no key information document (KID) required by Regulation (EU) No.
1286/2014 on key information documents for packaged and retail and
insurance-based investment products (the "PRIIPs Regulation") for offering or
selling the New Preferred Securities or otherwise making them available to
retail investors in the EEA has been prepared and therefore offering or
selling the New Preferred Securities or otherwise making them available to any
retail investor in the EEA may be unlawful under the PRIIPs Regulation.

PROHIBITION OF SALES TO UK RETAIL INVESTORS - The New Preferred Securities are
not intended to be offered, sold or otherwise made available to and should not
be offered, sold or otherwise made available to any retail investor in the UK.
For these purposes, a retail investor means a person who is one (or more) of:
(i) a retail client, as defined in point (8) of Article 2 of Regulation (EU)
No 2017/565 as it forms part of the UK domestic law by virtue of the UK
domestic law by virtue of European Union (Withdrawal) Act of 2018 (the
"EUWA"); or (ii) a customer within the meaning of the provisions of the
Financial Services and Markets Act 2000 (the "FSMA") and any rules or
regulations made under the FSMA to implement Insurance Distribution Directive,
where that customer would not qualify as a professional client, as defined in
point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of
the UK domestic law by virtue of the EUWA ("UK MiFIR"); or (iii) not a
qualified investor as defined in Article 2 of the Prospectus Regulation as it
forms part of UK domestic law by virtue of the EUWA.

Consequently no key information document required by the PRIIPs regulation as
it forms part of UK domestic law by virtue of the EUWA (the "UK PRIIPs
Regulation") for offering or selling the New Preferred Securities or otherwise
making them available to retail investors in the UK has been prepared and
therefore offering or selling the New Preferred Securities or otherwise making
them available to any retail investor in the UK may be unlawful under the UK
PRIIPs Regulation.

MIFID II PRODUCT GOVERNANCE / PROFESSIONAL INVESTORS AND ECPs ONLY TARGET
MARKET - Solely for the purposes of each manufacturer's product approval
process, the target market assessment in respect of the New Preferred
Securities has led to the conclusion that: (i) the target market for the New
Preferred Securities is eligible counterparties and professional clients only,
each as defined in MiFID II; and (ii) all channels for distribution of the New
Preferred Securities to eligible counterparties and professional clients are
appropriate. The target market assessment indicates that the New Preferred
Securities are incompatible with the needs, characteristic and objectives of
retail clients (as defined in MiFID II). Any person subsequently offering,
selling or recommending the New Preferred Securities (a "distributor") should
take into consideration the manufacturers' target market assessment. However,
a distributor subject to MiFID II is responsible for undertaking its own
target market assessment in respect of the New Preferred Securities (by either
adopting or refining the manufacturers' target market assessment) and
determining appropriate distribution channels.

The New Preferred Securities are being offered outside the United States to
non-U.S. persons, pursuant to the provisions of Regulation S ("Regulation S")
of the United States Securities Act of 1933, as amended (the "Securities
Act"). The New Preferred Securities will not be registered under the
Securities Act or the securities laws of any state or other jurisdiction of
the United States and may not be offered or sold in the United States or
delivered, directly or indirectly, within the United States or to, or for the
account or benefit of, U.S. persons absent registration or an applicable
exemption from the registration requirements of the Securities Act. Any
investment decision to purchase any New Preferred Securities should be made
solely on the basis of the information contained in the preliminary offering
circular relating to the New Preferred Securities that has been made available
to investors together with pricing details.

This announcement is not being distributed to, and must not be passed on to,
the general public in the UK and is not intended to be an invitation or
inducement to engage in investment activity for the purpose of Section 21 of
the FSMA. This announcement is directed only at: (i) persons who are outside
the UK; (ii) persons who are investment professionals within the meaning of
Article 19(5) of the Financial Promotion Order; (iii) high net worth entities
falling within Article 49(2)(a) to (d) of the Financial Promotion Order or
(iv) any other persons to whom this announcement for the purposes of Section
21 of the FSMA can otherwise lawfully be distributed (all such persons
together being referred to as "relevant persons"), and must not be acted on or
relied upon by persons other than relevant persons. Any investment or
investment activity to which this announcement relates is available only to
and will be engaged in only with relevant persons.

The New Preferred Securities may not be offered or sold or distributed, nor
may any subsequent resale of New Preferred Securities be carried out in Spain,
except in circumstances which do not require the registration of a prospectus
in Spain or without complying with all legal and regulatory requirements under
Spanish securities laws. No publicity or marketing of any kind shall be made
in Spain in relation to the New Preferred Securities.

Neither the New Preferred Securities nor the Offering Circular in connection
thereof have been registered with the Spanish Securities Market Commission
(Comisión Nacional del Mercado de Valores) (the "CNMV") and therefore the
Offering Circular is not intended for any offer of the New Preferred
Securities in Spain that would require the registration of a prospectus with
the CNMV.

This announcement is not an offer of securities or investments for sale nor a
solicitation of an offer to buy securities or investments in any jurisdiction
where such offer or solicitation would be unlawful. No action has been taken
that would permit an offering of the New Preferred Securities or possession or
distribution of this announcement in any jurisdiction where action for that
purpose is required. Persons into whose possession this announcement comes are
required to inform themselves about and to observe any such restrictions.

Singapore Securities and Futures Act Product Classification - In connection
with Section 309B of the Securities and Futures Act 2001 of Singapore (the
"SFA") and the Securities and Futures (Capital Markets Products) Regulations
2018 of Singapore (the "CMP Regulations 2018"), Santander has determined, and
hereby notifies all relevant persons (as defined in Section 309A(1) of the
SFA), that the New Preferred Securities are 'prescribed capital markets
products' (as defined in the CMP Regulations 2018) and Excluded Investment
Products (as defined in the MAS Notice SFA 04-N12: Notice on the Sale of
Investment Products and the MAS Notice FAA-N16: Notice on Recommendations on
Investment Products)

A COPY OF THE PRELIMINARY OFFERING CIRCULAR AND FINAL OFFERING CIRCULAR MAY BE
OBTAINED BY ELIGIBLE INVESTORS FROM YOUR SALES REPRESENTATIVE.

The Joint Lead Managers are acting exclusively for the issuer of the New
Preferred Securities and for no-one else in connection with the book-build and
allocation process for the issuance of the New Preferred Securities. The Joint
Lead Managers will not regard any other person (whether or not a recipient of
this communication) as a client in relation to the New Preferred Securities
and will not be responsible to anyone other than the issuer for providing the
protections afforded to clients of the Joint Lead Managers, nor for providing
services and/or advice in connection with the offering of the New Preferred
Securities. Please contact your sales representative if you have any further
questions. Information on the Joint Lead Managers fee (as the case may be) in
connection with the New Preferred Securities is available from your usual
sales representative upon request.

 

Notice to U.S. Investors

The proposed transaction relates to the securities of Banco Santander, S.A., a
company incorporated in Spain. Information distributed in connection with the
proposed transaction is subject to Spanish disclosure requirements that are
different from those of the United States.

It may be difficult for you to enforce your rights and any claim you may have
arising under the U.S. federal securities laws in respect of the proposed
transaction, since the company is located in Spain and some or all of its
officers and directors are residents of Spain. You may not be able to sue the
company or its officers or directors in a Spanish court for violations of the
U.S. securities laws. Finally, it may be difficult to compel the company and
its affiliates to subject themselves to a U.S. court's judgment.

You should be aware that the company may purchase subject securities otherwise
than under the proposed transaction, such as in open market or privately
negotiated purchases, at any time during the pendency of the proposed
transaction.

The New Preferred Securities are being offered outside the United States to
non-U.S. persons, pursuant to the provisions of Regulation S. The New
Preferred Securities will not be registered under the Securities Act or the
securities laws of any state or other jurisdiction of the United States and
may not be offered or sold in the United States or delivered, directly or
indirectly, within the United States or to, or for the account or benefit of,
U.S. persons absent registration or an applicable exemption from the
registration requirements of the Securities Act. Any investment decision to
purchase any New Preferred Securities should be made solely on the basis of
the information contained in the preliminary offering circular relating to the
New Preferred Securities that has been made available to investors together
with pricing details.

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