Santander sets final terms on AT1 bond as books exceed EUR17bn

Wed Mar 5, 2014 5:12am EST

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LONDON, March 5 (IFR) - Banco Santander will print EUR1.5bn of Additional Tier 1 bonds later on Wednesday at a yield of 6.25%, on a book of more than EUR17bn from over 820 accounts.

The Spanish bank began marketing the perpetual non-call five-year deal on Wednesday morning with initial price thoughts of mid to high 6%. As books approached EUR13bn, guidance was set at 6.25%-6.5%.

The bank is rated Baa1/BBB/BBB+ by Moody's/S&P/Fitch, with the notes expected to be Ba2 by Moody's. The bond will convert into shares if the bank's Common Equity Tier 1 (CET1) ratio falls below 5.125% at the bank or group level.

As of the end of 2013, Santander's CET1 ratio stood at 10.45% at the group and 12.26% at the bank level.

The lead managers are Bank of America Merrill Lynch, Citigroup, Santander and UBS. (Reporting By Josie Cox, editing by Julian Baker)

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