By Evan Weinberger
New York, Oct. 3 – Banco Santander SA priced an upsized €7 billion in convertible bonds due Oct. 3, 2012.
The convertibles have a 7.25% coupon in the first year. After the first year, the convertibles will carry a floating-rate coupon of Euribor plus 275 basis points.
The convertibles have an initial conversion premium of 16%. Talk had the initial conversion premium at 20%.
The convertibles were distributed to Spanish customers through Banco Santander’s retail banks. According to Banco Santander, 129,000 investors made an average €54,000 investment.
The bank is part of a consortium, led by the Royal Bank of Scotland, Plc and also including Fortis NV, which is offering €71.7 billion for Amsterdam-based ABN Amro. If the acquisition of ABN Amro is not completed within one year of issuance, the convertibles will be called at a 107.5%.
Banco Santander is Europe’s second largest bank and is based in Santander, Spain. Barclays Bank plc is preparing a rival bid for the largest Dutch bank.
Issuer: Banco Santander SA
Issue: Convertible bonds
Amount: €7 billion
Maturity: Oct. 3, 2012
Coupon; 7.25% in first year, Euribor plus 275 basis points after
Price: Par
Yield: 7.5% if Royal Bank of Scotland, Fortis NV and Banco Santander’s purchase of ABN Amro is not completed within one year
| Initial conversion premium: | 16%
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| Call: | After one year, at 7.5%, if Bank of Scotland, Fortis NV and Banco Santander’s purchase of ABN Amro is not completed
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| Distribution: | Retail to customers in Spain through Banco Santander’s branches
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| Talk: | 20% initial conversion premium
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