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Banco Santander offers to exchange preferred shares for new ordinary shares for a maximum amount of EUR 1.966 billion

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Banco Santander offers to exchange
preferred shares for new ordinary shares
for a maximum amount of EUR 1.966 billion

Published in: Economy & Finance, Business
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Banco Santander offers to exchange preferred shares for new ordinary shares for a maximum amount of EUR 1.966 billion

  1. 1. Press Release Banco Santander offers to exchange preferred shares for new ordinary shares for a maximum amount of EUR 1.966 billion The offer provides investors with more liquidity and transforms an instrument which is no longer considered regulatory capital into core capital.Madrid, Dec. 2, 2011 - Banco Santander’s Board of Directors has approved an offer for therepurchase of preferred shares and subscription of new Banco Santander ordinary shares.The offer affects the issue of Participaciones Preferentes Serie X carried out in June 2009 bySantander Finance Capital for a total amount of nearly EUR 1.966 billion.With this offer, investors holding preferred shares have the opportunity to sell these securitiesto the Bank at nominal value and subscribe the same amount of Banco Santander ordinaryshares, which are fully liquid. Moreover, at current prices, Santander shares offer a dividendyield of more than 10%.At the same time, this exchange enables Banco Santander to transform these instruments,which are no longer considered basic capital following the regulatory change of February2011, into other instruments, capital and reserves, which have the highest capital rating bothunder current regulation and Basel III, which will come into force in 2013. If every investorexchanges their preferred shares, Banco Santander would issue EUR 1.966 billion in newshares, equivalent to 0.35% core capital. The European Banking Authority (EBA) requiresbanks to achieve core capital of 9% as of June 30, 2012. Banco Santander has set the goal ofreaching 10% by that date.The holders of the preferred shares as of Dec. 5 will be able to substitute their securities forordinary shares. The price will be the average Banco Santander share price during the offerperiod (expected to take place between Dec. 14 and Dec. 23). They will receive as manySantander shares as results from dividing the amount of their original investment in preferredshares by the abovementioned average price.Investors accepting the offer will receive the preferred shares’ coupon due on Dec. 30,amounting to 3.774% per year, and will have full economic rights deriving from the ordinaryBanco Santander shares once they receive them. Therefore, they will be entitled to participatein Santander’s scrip dividend programme of Feb. 1, 2012.The terms and conditions of this exchange offer and the simultaneous capital increase will besubject to a prospectus which will be registered in the CNMV. Attached is the calendar of theexchange offer. The new shares are expected to be issued before the end of the year and tobe listed during the first week of January. 1Comunicación Externa.Ciudad Grupo Santander Edificio Arrecife Pl. 228660 Boadilla del Monte (Madrid) Telf.: 34 91 289 52 11email: comunicacionbancosantander@gruposantander.com

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