Sovereign Bancorp Completes $1.9 Billion Capital Raise

PHILADELPHIA, May 20 /PRNewswire-FirstCall/ -- Sovereign Bancorp, Inc.
("Sovereign or the Company") (NYSE: SOV), parent company of Sovereign Bank
("Bank"), today announced that it has completed its previously announced
equity and debt offerings, which raised a total of approximately $1.9 billion
for Sovereign and the Bank.
"By proactively taking action to raise additional capital we feel we are
well equipped to handle any further deterioration in the economy," said Joseph
P. Campanelli, Sovereign's President and CEO. "We are pleased that our common
stock offering was significantly oversubscribed and the interest in the
offering from investors in the U.S. and in Europe underscores their confidence
in the future of our company." Campanelli added, "We continue to believe
strongly in the fundamentals of our business, particularly related to our
focus on accelerating the performance of our retail franchise. Our footprint
in the Northeast U.S. has been much less affected by the housing and economic
downturn in other parts of the country, giving Sovereign an important
competitive advantage in the current environment."
Sovereign issued 179,687,500 shares of common stock at a purchase price of
$8.00 per share for net proceeds, after the underwriting discount and offering
expenses, of approximately $1.39 billion. The number of shares sold includes
23,437,500 shares sold pursuant to the exercise in full of the underwriter's
over-allotment option.
In addition, the Bank issued $500 million of fixed rate subordinated
notes. The notes have a coupon of 8.75% and will mature as of May 30, 2018.
Lehman Brothers Inc. acted as the sole book-running manager for the common
stock and debt offering and Sandler O'Neill & Partners L.P. acted as
co-manager of the debt offering.
The capital raise places Sovereign's capital ratios in or above its peer
group. With the additional capital, Sovereign's capital ratios at both the
holding company and the Bank now exceed "well-capitalized" levels as defined
by the regulatory agencies for commercial banks and thrifts. Sovereign
intends to use the net proceeds of the offerings for general corporate and
banking purposes, including repayment of Federal Home Loan Bank borrowings.
About Sovereign
Sovereign Bancorp, Inc., ("Sovereign") (NYSE: SOV), is the parent company
of Sovereign Bank, a financial institution with principal markets in the
Northeastern United States. Sovereign Bank has 750 community banking offices,
over 2,300 ATMs and approximately 12,000 team members. Sovereign offers a
broad array of financial services and products including retail banking,
business and corporate banking, cash management, capital markets, wealth
management and insurance. For more information on Sovereign Bank, visit
http://www.sovereignbank.com or call 1-877-SOV-BANK.
Forward-Looking Statements
The information contained in this press release includes forward-looking
statements. These forward-looking statements are subject to the inherent
uncertainties in predicting future results and conditions. Certain factors
could cause actual results and conditions to differ materially from those
projected in these forward-looking statements, and these factors are
enumerated in Sovereign's filings with the Securities and Exchange Commission.
This press release should be read in conjunction with the company's recent SEC
filings.
SOURCE Sovereign Bancorp, Inc.

FINANCIAL, Kirk Walters, +1-617-346-7346, kwalter1@sovereignbank.com or Stacey
Weikel, +1-610-320-8428, sweikel@sovereignbank.com; MEDIA, Ed Shultz,
+1-610-378-6159, eshultz1@sovereignbank.com, all of Sovereign Bancorp, Inc.