Santander Issues $2.5 Billion in New AT1 Bonds
November 17 2023 - 4:52AM
Dow Jones News
By Miriam Mukuru
Santander said it has issued $2.5 billion in Additional Tier 1
bonds, following recent similar issuances by other European banks
including UBS Group, Societe Generale and Barclays.
AT1 bonds are risky debt created after the global financial
crisis which act as safety buffers if a bank's capital levels fall
below a certain threshold. They can be converted into equity or
written down if the bank runs into trouble.
The issuance comprises two parts, consisting of $1.15 billion in
five-year call bonds and $1.35 billion in 10-year call bonds, both
priced at 9.625%.
Market sources say the total book size was around $8 billion,
$3.25 billion for the five-year call bonds and $4.75 billion for
the 10-year call bonds.
As with other recently-issued AT1 bonds, Santander said the
bonds would be convertible into shares upon a trigger event--in
this case, the bank's common equity Tier 1 ratio falling below
5.125%.
Write to Miriam Mukuru at miriam.mukuru@wsj.com
(END) Dow Jones Newswires
November 17, 2023 04:37 ET (09:37 GMT)
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