Santander finalizes exchange offer results for 4.45%, 3.7% notes

By Wendy Van Sickle

Columbus, Ohio, Oct. 4 –Santander Holdings USA, Inc. announced the revised final results of its exchange offers for any and all of its $1 billion 4.45% notes due 2021 and $1.44 billion 3.7% notes due 2022 on Friday.

On Wednesday, the company announced the preliminary final results, which it revised upwardly on Friday after settlement of the tenders submitted under guaranteed delivery procedures.

In total, holders tendered for exchange $378,026,000 of the 4.45% notes and $570,827,000 of the 3.7% notes, all of which were accepted.

This was up from the expiration time, 5 p.m. ET on Oct. 1, by which time holders had tendered for exchange $377,926,000 of the 4.45% notes and $569,521,000 of the 3.7% notes.

The company said it issued $948,853,000 of new 3.244% senior notes due 2026 in the exchange.

In the concurrent cash tender offer, the company received and accepted $15,984,000 of tenders for the 4.45% notes and $21,292,000 of tenders for the 3.7% notes. These totals did not change after the expiry of the offer.

The exchange price for each $1,000 principal amount of the old notes validly tendered and accepted for exchange is a combination of (i) a principal amount of new notes equal to the discounted value on the payment date of the remaining payments of principal and interest through the applicable par call date of the old notes, using a yield based on the bid-side price of the reference Treasury security plus the fixed spread, minus the cash component and (ii) cash with an aggregate value equal to the applicable exchange price per $1,000 principal amount of existing notes minus $1,000, the cash component.

Pricing for the 4.45% notes was set using the 1.5% Treasury note due Aug. 31, 2021 plus a fixed spread of 60 basis points, for a purchase price of $1,045.98 per $1,000 of notes.

Pricing for the 3.7% notes was set using the 1.5% Treasury note due Sept. 15, 2022 plus a fixed spread of 80 bps, for a purchase price of $1,032.78 per $1,000 of notes.

Pricing was set at 2 p.m. ET on Oct. 1.

The reference security and spread for each series is the same for the exchange offer as it is in the tender offers.

The exchange offers were conditioned on the company pricing at least $400 million of new notes.

The company said it made the offers in order to retire all or a portion of the old notes prior to their maturity. It intends to fund the purchases from cash on hand.

Barclays (800 438-3242 or 212 528-7581), Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) and Santander Investment Securities Inc. (855 404-3636 or 212 940-1442) are the dealer managers, and D.F. King & Co., Inc. (212 269-5550 or 800 814-2879) is the tender agent, exchange agent and information agent.

Boston-based Santander Holdings USA is a wholly owned subsidiary of Madrid-based Banco Santander, SA.

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