Form 6-K Banco Santander, S.A. For: May 24
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2022
Commission File Number: 001-12518
BANCO SANTANDER, S.A.
Ciudad Grupo Santander
28660 Boadilla del Monte
Madrid Spain
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
EXPLANATORY NOTE
In connection with the issuance by Banco Santander, S.A. of $1,500,000,000 aggregate principal amount of 3.892% Senior Preferred Rate Notes due 2024 and of $650,000,000 aggregate principal amount of Senior Preferred Floating Rate Notes due 2024, Banco Santander, S.A. is filing the following documents solely for incorporation into the Registration Statement on Form F-3 (File No. 333-238243):
Exhibit List
| Exhibit | ||
| No. |
Description | |
| 1.1 | Underwriting Agreement dated as of May 16, 2022 | |
| 4.1 | Third Supplemental Indenture, dated as of May 24, 2022, to the Senior Preferred Debt Securities Indenture, dated as of June 30, 2021, among Banco Santander, S.A., as Issuer, The Bank of New York Mellon, London Branch, as Trustee, Calculation Agent and Principal Paying Agent, and The Bank of New York Mellon SA/NV, Luxembourg Branch, as Registrar | |
| 4.2 | Form of Global Note for the 3.892% Senior Preferred Fixed Rate Notes due 2024 (included in Exhibit A of the Third Supplemental Indenture to the Senior Preferred Debt Securities Indenture (Exhibit 4.1 to this filing)) | |
| 4.3 | Form of Global Note for the Senior Preferred Floating Rate Notes due 2024 (included in Exhibit B of the Third Supplemental Indenture to the Senior Preferred Debt Securities Indenture (Exhibit 4.1 to this filing)) | |
| 5.1 | Opinion of Uría Menéndez | |
| 5.2 | Opinion of Davis Polk & Wardwell LLP | |
| 23.1 | Consent of Uría Menéndez (included in Exhibit 5.1 to this filing) | |
| 23.2 | Consent of Davis Polk & Wardwell LLP (included in Exhibit 5.2 to this filing) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BANCO SANTANDER, S.A. (Registrant) | ||||||
| Date: May 24, 2022 | By: | /s/ José Antonio Soler | ||||
| Name: | José Antonio Soler | |||||
| Title: | Authorized Representative | |||||
Exhibit 1.1
BANCO SANTANDER, S.A.
(a company with limited liability organized under
the laws of The Kingdom of Spain)
U.S.$1,500,000,000 3.892% Senior Preferred Fixed Rate Notes due 2024
U.S.$650,000,000 Senior Preferred Floating Rate Notes due 2024
UNDERWRITING AGREEMENT
May 16, 2022
Barclays Capital Inc.
745 Seventh Avenue
New York, NY 10019
Goldman Sachs Bank Europe SE
Marienturm, Taunusanlage 9-10, 60329
Frankfurt am Main
Germany
RBC Capital Markets, LLC
Brookfield Place
200 Vesey Street, 8th Floor
New York, NY 10281
Santander Investment Securities Inc.
45 East 53rd Street
New York, NY 10022
TD Securities (USA) LLC
1 Vanderbilt Avenue, 11th Floor
New York, NY 10017
Wells Fargo Securities, LLC
550 S Tyron Street, 5th Floor
Charlotte, NC 28202
As Representatives of the Several Underwriters
named on Schedule I hereto
Ladies and Gentlemen:
Banco Santander, S.A., a sociedad anónima incorporated under the laws of The Kingdom of Spain (the “Bank”), proposes to issue and sell to the several underwriters named in Schedule I hereto (the “Underwriters”), acting severally and not jointly, the respective amounts set forth in Schedule I hereto of the securities specified in Exhibit D hereto (the “Securities”) to be issued pursuant to the resolutions of the Bank’s Executive Committee approving the issuance of the Securities and the indenture dated
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June 30, 2021 (the “Base Indenture”) between the Bank and The Bank of New York Mellon, London Branch, as trustee (the “Trustee”) as supplemented, with respect to the Securities, by a supplemental indenture to be dated on or about May 24, 2022, which together with the Base Indenture sets out the terms and rights of this particular issue of Securities (the “Third Supplemental Indenture” and the Base Indenture as supplemented, with respect to the Securities, by the Third Supplemental Indenture, and as further supplemented from time to time, the “Indenture”). Barclays Capital Inc., Goldman Sachs Bank Europe SE, RBC Capital Markets, LLC, Santander Investment Securities Inc., TD Securities (USA) LLC and Wells Fargo Securities, LLC have agreed to act as representatives of the several Underwriters (in such capacity, the “Representatives”) in connection with the offering and sale of the Securities.
The Bank has filed with the Securities and Exchange Commission (the “Commission”) a registration statement, including a prospectus (file number 333-238243), on Form F-3 relating to securities (the “Shelf Securities”), including the Securities, to be issued from time to time by the Bank. The registration statement as amended to the date of this agreement (the “Agreement”), including the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A or Rule 430B under the Securities Act of 1933, as amended (the “Securities Act”), is hereinafter referred to as the “Registration Statement,” and the related prospectus covering the Shelf Securities dated May 14, 2020, in the form first used to confirm sales of the Securities (or in the form first made available to the Underwriters by the Bank to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “Base Prospectus.” The Base Prospectus, as supplemented by the prospectus supplement specifically relating to the Securities in the form first used to confirm sales of the Securities (or in the form first made available to the Underwriters by the Bank to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “Prospectus,” and the term “preliminary prospectus” means any preliminary form of the Prospectus. For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act, “Time of Sale Prospectus” means the Base Prospectus as supplemented by the preliminary prospectus, together with the free writing prospectuses, if any, each identified in Exhibit E hereto, and intended for general distribution to prospective investors, and “road show” means any road show as defined in Rule 433(h) under the Securities Act. As used herein, the terms “Registration Statement,” “Base Prospectus,” “preliminary prospectus,” “Time of Sale Prospectus” and “Prospectus” shall include the documents, if any, incorporated by reference therein. The terms “supplement,” “amendment,” and “amend” as used herein with respect to the Registration Statement, the Base Prospectus, the Time of Sale Prospectus, any preliminary prospectus or free writing prospectus shall include all documents subsequently filed by the Bank with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are deemed to be incorporated by reference therein.
| 1. | Representations and Warranties. The Bank represents and warrants to, and agrees with, each of the Underwriters that as of the date hereof: |
| (a) | The Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. The Bank is a well-known seasoned issuer (as defined in Rule 405 under the Securities Act) eligible to use the Registration Statement as an “automatic shelf registration statement” (as defined in Rule 405 under the Securities Act) and the Bank has not received notice that the Commission objects to the use of the Registration Statement as an automatic shelf registration statement. |
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| (b) | Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Time of Sale Prospectus or the Prospectus complied or will comply when so filed in all material respects with the Securities Act, the Exchange Act and the applicable rules and regulations of the Commission thereunder, (i) each part of the Registration Statement, when such part became effective, did not contain, and each such part, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Registration Statement as of the date hereof does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) the Registration Statement and the Prospectus comply, and as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder, (iv) the Time of Sale Prospectus does not, and at the time of each sale of the Securities in connection with the offering when the Prospectus is not yet available to prospective purchasers and at the Closing Date (as defined in Section 3 below), the Time of Sale Prospectus, as then amended or supplemented by the Bank, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (v) each road show, if any, when considered together with the Time of Sale Prospectus, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and (vi) the Prospectus does not contain and, as amended or supplemented, if applicable, at the Closing Date, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to (A) statements or omissions in the Registration Statement, the Time of Sale Prospectus or the Prospectus based upon information relating to any Underwriter furnished to the Bank in writing by such Underwriter expressly for use therein (it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 16 hereof) or (B) that part of the Registration Statement that constitutes the Statement of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), of the Trustee. |
| (c) | The Bank is not an “ineligible issuer” in connection with the offering pursuant to Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus that the Bank is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each free writing prospectus that the Bank has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or on behalf of or used or referred to by the Bank complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder and did not include any untrue statement of a material fact or omit to state any material |
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| fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Except for the free writing prospectuses, if any, identified in Exhibit E hereto, and electronic road shows, if any, each furnished to the Representatives before first use, the Bank has not prepared, used or referred to, and will not, without the Representatives’ prior consent, prepare, use or refer to, any free writing prospectus. |
| (d) | The Bank has been duly incorporated and is validly existing as a limited liability corporation (sociedad anónima) in good standing under the laws of The Kingdom of Spain. |
| (e) | On or prior to the Closing Date, the Securities will be duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be entitled to the benefits of the Indenture, and will constitute valid and legally binding obligations of the Bank, enforceable against the Bank in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally or by general equity principles; the Securities will be consistent with the descriptions thereof contained in the Time of Sale Prospectus and the Prospectus, and such descriptions will conform to the rights set forth in the instruments defining the same. |
| (f) | This Agreement has been duly authorized, executed and delivered by the Bank. |
| (g) | On or prior to the Closing Date, the Indenture will have been duly qualified under the Trust Indenture Act, will have been duly authorized by the Bank and will constitute a valid and legally binding agreement of the Bank, enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally or by general equity principles. |
| (h) | The execution and delivery of this Agreement and the Indenture, the issuance, delivery and sale of the Securities, the performance of this Agreement and compliance by the Bank, as applicable, with the terms of this Agreement, the Indenture and the terms of the Securities have been duly authorized by all necessary corporate action on the part of the Bank, as applicable, and, upon their execution and delivery, did not or, if applicable, will not result in any violation of the memorandum and articles of association (or similar constitutive documents) of the Bank and do not and will not conflict with, or breach, any of the terms or provisions of, or constitute a default under, (i) any indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Bank is a party or by which it may be bound or to which any of its properties may be subject or (ii) any existing applicable law, rule, regulation, judgment, order or decree of any governmental instrumentality or court having jurisdiction over the Bank or any of the properties of either of them (except, in either case, for such conflicts, breaches or defaults that would not have a material adverse effect on the financial condition of the Bank and its subsidiaries considered as one enterprise, or on the earnings or business affairs of the Bank and its subsidiaries, considered as one enterprise). |
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| (i) | No consent, approval, authorization or order of any governmental instrumentality or court is required for the consummation by the Bank of the transactions contemplated hereby, except (i) such as may be required by the securities or Blue Sky laws of the various states of the United States in connection with the offer and sale of the Securities, and (ii) such approvals as have been obtained. Notwithstanding the foregoing, on or after the Closing Date, the public deed of issuance (escritura de emisión) shall be registered with the Mercantile Registry of Cantabria. |
| (j) | Neither the Bank, nor any of its affiliates (as defined in Rule 405 under the Securities Act), nor any person acting on its or their behalf has taken or will take, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to cause or result in, the stabilization in violation of applicable laws or manipulation of the price of any security of the Bank to facilitate the sale or resale of the Securities. |
| (k) | The preliminary prospectus filed with the Commission pursuant to Rule 424 under the Securities Act on May 16, 2022 complied when so filed in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder. |
| (l) | The Bank maintains “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act). |
| (m) | The Bank is not, and after giving effect to the offer and sale of the Securities, will not be, required to register as an “investment company,” as such term is defined in the U.S. Investment Company Act of 1940, as amended (the “Investment Company Act”). |
| (n) | The financial statements of the Bank and its consolidated subsidiaries, together with the related schedules, if any, (the “Financial Statements”) that have been included or incorporated by reference in the Registration Statement, the Time of Sale Prospectus and the Prospectus present fairly the financial position of the Bank and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Bank and its consolidated subsidiaries for the periods specified; and said Financial Statements have been prepared in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (the “IFRS-IASB”). The supporting schedules, if any, included or incorporated by reference in the Time of Sale Prospectus and the Prospectus present fairly, in accordance with IFRS-IASB, the information required to be stated therein. The selected financial data and the summary financial information included or incorporated by reference in the Time of Sale Prospectus and the Prospectus present fairly, in accordance with IFRS-IASB, the information shown therein and have been compiled on a basis consistent with that of the Financial Statements incorporated by reference in the Time of Sale Prospectus and the Prospectus. |
| (o) | The Bank acknowledges and agrees that each of the Underwriters is acting solely in the capacity of an arm’s length contractual counterparty to the Bank with respect to the offering of the Securities (including in connection with determining the terms of the offering contemplated by this Agreement) and not as an agent or fiduciary to the Bank or any other person. Additionally, the Underwriters are not advising the Bank or any other person as to any legal, tax, investment, accounting or regulatory matters in any |
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| jurisdiction. The Bank shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of such matters, and the Underwriters shall have no responsibility or liability to the Bank or any other person with respect to such matters. Any review by the Underwriters of the Bank, the transactions contemplated by this Agreement or any other due diligence review by the Underwriters in connection with such transactions will be performed solely for the benefit of the Underwriters and shall not be on or behalf of the Bank or any other person. |
| (p) | So long as certain conditions set forth in Law 10/2014, of June 26, on organization, supervision and solvency of credit institutions (“Law 10/2014”) are met, any payments in respect of the Securities made by the Bank to a beneficial owner, who is not tax resident in Spain and does not operate with respect to the Securities through a permanent establishment in Spain, shall not be subject to taxation in Spain pursuant to Royal Legislative Decree 5/2004 of March 5, promulgating the consolidated text of the non- resident income tax law (Real Decreto Legislativo 5/2004, de 5 de Marzo, por el que se aprueba el texto refundido de la Ley del Impuesto sobre la Renta de no Residentes), and no withholding tax on account of Spanish taxes shall be required on such payments, except that payments made to beneficial owners, who are not tax resident in Spain, where the Bank has not received from the paying agent certain information about the Securities will be subject to Spanish withholding tax at the applicable rate (currently 19%). |
| (q) | The payment obligations of the Bank under the Securities on account of principal constitute direct, unconditional, unsubordinated and unsecured obligations (créditos ordinarios) of the Bank and, upon the insolvency of the Bank (but subject to any other ranking that may apply as a result of any mandatory provision of law (or otherwise)), such payment obligations in respect of principal rank (i) pari passu among themselves and with any other unsecured and unsubordinated obligations (créditos ordinarios) of the Bank, other than any unsubordinated and unsecured senior non preferred obligations (créditos ordinarios no preferentes) of the Bank under Additional Provision 14.2 of Law 11/2015, and any other obligations which, by law and/or by their terms, and to the extent permitted by Spanish law, rank pari passu with such obligations (the “Senior Non Preferred Obligations”), and (ii) senior to (x) any Senior Non Preferred Obligations and (y) any present and future subordinated obligations (créditos subordinados) of the Bank in accordance with Article 281 of Royal Legislative Decree 1/2020, of 5 May, on insolvency (Real Decreto Legislativo 1/2020, de 5 de mayo, por el que se aprueba el texto refundido de la Ley Concursal), as amended from time to time (the “Spanish Insolvency Law”). |
| (r) | As of the date hereof, the Bank has not made, and will not make (without prior consent of the Representatives) any public offer of the Securities by means of Supplemental Offering Materials. For purposes of this Agreement, “Supplemental Offering Materials” means any “written communication” (within the meaning of the rules and regulations promulgated under the Securities Act) prepared by or on behalf of the Bank, or used or referred to by the Bank, that constitutes an offer to sell or a solicitation of an offer to buy the Securities (other than the free writing prospectuses identified in Exhibit E hereto, the Time of Sale Prospectus and the Prospectus), including, without limitation, any road show materials relating to the Securities that constitute such a written communication. |
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| (s) | Under the laws of The Kingdom of Spain, neither the Bank, nor any of its revenues, assets or properties have any right of immunity from service of process or from the jurisdiction of competent courts of The Kingdom of Spain or the United States or the State of New York in connection with any suit, action or proceeding, attachment prior to judgment, attached in aid of execution of a judgment or execution of a judgment or from any other legal process with respect to its obligations under this Agreement, the Indenture and the Securities (together, the “Transaction Documents”). |
| (t) | The choice of the law of the State of New York as the governing law of the Transaction Documents, except for those sections or provisions which are subject to Spanish law as set forth in the Prospectus, is a valid, effective and irrevocable choice of law under the laws of The Kingdom of Spain. The Bank has the power to submit and, pursuant to the Transaction Documents to which it is a party, has legally, validly, effectively and irrevocably submitted to the non-exclusive personal jurisdiction of the United States District Court for the Southern District of New York and the Supreme Court of New York, New York County (including, in each case, any appellate courts therefrom) in any suit, action or proceeding against it arising out of or related to any of the Transaction Documents, including with respect to its obligations, liabilities or any other matter arising out of or in connection with this Agreement, and has validly and irrevocably waived any objection to the venue of a proceeding in any such court and has the power to designate, appoint and empower and pursuant to Section 13 of this Agreement has legally, validly, effectively and irrevocably designated, appointed and empowered an agent for service of process in any suit or proceeding based on or arising under this Agreement in any federal or state court in the State of New York. |
| (u) | None of the Bank or any of its Significant Subsidiaries (as such term is defined in Rule 1.02(w) of Regulation S-X under the Securities Act (“Significant Subsidiaries”)), nor, to the knowledge of the Bank, any director, officer, agent, employee, affiliate or person acting on behalf of the Bank is currently subject to any U.S. sanctions administered by the U.S. Department of State or the Office of Foreign Assets Control of the U.S. Treasury Department or any similar European, Spanish, U.K. or Brazilian sanctions administered by the European Union, Spain, the United Kingdom or Brazil (together, “Sanctions”), and the Bank is not located, organized or resident in a country or a territory that is the subject of such sanctions; and the Bank will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person known by the Bank to be currently subject to any Sanctions or is in Iran, North Korea, Syria, Cuba, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic or in any other country or territory that, at the time of such funding is the subject of such sanctions, except to the extent permissible for a person required to comply with such Sanctions; nor will the Bank directly or indirectly use the transaction proceeds to contravene any Sanctions provided that this Section 1(u) shall only apply, and shall only be sought by the Underwriters, to the extent that it does not result in a breach and/or violation of any |
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| provision of (A) Council Regulation (EC) No 2271/96 of 22 November 1996 (or any law or regulation implementing such Regulation in any member state of the European Union) or (B) section 7 of the German Foreign Trade Ordinance (AWV) (Außenwirtschaftsverordnung) or any other applicable blocking or anti-boycott statute as it applies to German Underwriters only or (C) Council Regulation (EC) No 2271/96 as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act of 2018 (“EUWA”) or any other similar blocking or anti boycott law of the United Kingdom. |
| (v) | The operations of the Bank and its Significant Subsidiaries are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the European Union, The Kingdom of Spain, the United Kingdom, Brazil, the United States and each State thereof and the money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any European, Spanish, U.K., Brazilian or U.S., as applicable, governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Bank or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Bank, threatened (except for actions, suits or proceedings that are being or expected to be contested or appealed in good faith and which would not be material in the context of the issuance and sale of the Securities). |
| (w) | None of the Bank or any of its Significant Subsidiaries or, to the knowledge of the Bank, any director, officer, agent, employee of the Bank or any of the Bank’s Significant Subsidiaries (i) is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), the U.K. Bribery Act or any other anti-corruption law, rule or regulation of any locality that is applicable to the Bank (“applicable anti-corruption laws”) or (ii) has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any “foreign official” (as such term is defined in the FCPA) (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to influence official action or secure an improper advantage. Each of the Bank and its Significant Subsidiaries has conducted its businesses in compliance with the FCPA, the U.K. Bribery Act and applicable anti-corruption laws and, to the knowledge of the Bank, its respective affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure continued compliance therewith. |
| (x) | PricewaterhouseCoopers Auditores, S.L. is an independent registered public accounting firm as required by the Securities Act and the applicable rules and regulations of the Commission. |
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| (y) | The waiver of certain requirements under Rule 3-05 of Regulation S-X issued to the Bank by the Commission on June 14, 2017, a true copy of which has been provided to the Representatives, remains in effect as of the date of this Agreement and has not been rescinded or amended. |
| 2. | Purchase and Sale. |
| (a) | Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Bank agrees to issue and sell to each of the Underwriters and each of the Underwriters agrees, severally and not jointly, to purchase from the Bank, the aggregate principal amount of Securities set forth opposite such Underwriter’s name on Schedule I hereto at a purchase price of 100.000% of the principal amount of the U.S.$1,500,000,000 3.892% Senior Preferred Fixed Rate Notes due 2024 and 100.000% of the principal amount of the U.S.$650,000,000 Senior Preferred Floating Rate Notes due 2024. The Bank hereby agrees to pay a commission of (i) 0.15% of the aggregate principal amount of the U.S.$1,500,000,000 3.892% Senior Preferred Fixed Rate Notes due 2024 (the “Fixed Underwriting Commission“) and (ii) 0.15% of the U.S.$650,000,000 Senior Preferred Floating Rate Notes due 2024 (the “Floating Underwriting Commission” and together with the Fixed Underwriting Commission, the “Underwriting Commissions”) to the Underwriters, in consideration of the Underwriters agreeing severally, and not jointly, to purchase the Securities from the Bank subject to, and in accordance with, the terms and conditions set forth in this Agreement. The Bank agrees that (i) 30.00% of such Fixed Underwriting Commission will be paid to Santander Investment Securities Inc.; (ii) 63.00% of such Fixed Underwriting Commission will be divided equally among the Representatives, excluding Santander Investment Securities Inc., and (iii) 7.00% of such Fixed Underwriting Commission will be divided equally among the Co-Leads (as defined herein). The Bank further agrees that (i) 30.12% of such Floating Underwriting Commission will be paid to Santander Investment Securities Inc.; (ii) 62.77% of such Floating Underwriting Commission will be divided equally among the Representatives, excluding Santander Investment Securities Inc., and (iii) 7.11% of such Floating Underwriting Commission will be divided equally among the Co-Leads. The total proceeds to the Bank in an amount of U.S.$2,147,059,676.93 (which is equal to U.S.$2,146,775,000 of proceeds, net of fees and commissions, plus U.S.$284,676.93 in costs) will be payable on the Closing Date concurrently with the settlement of the Securities or such other date as may be agreed by the Bank and the Representatives, by wire transfer of immediately available funds to an account identified in writing by May 24, 2022. For purposes of this Section 2(a), “Co-Leads” shall mean American Veterans Group, PBC, Banco de Sabadell, S.A., Blaylock Van, LLC, Caixa—Banco de Investimento, S.A., CIBC World Markets Corp., Scotia Capital (USA) Inc. and UBS Securities LLC. |
| (b) | Payment of the Underwriting Commissions by the Bank to the Underwriters may be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatsoever nature imposed, levied, collected, withheld or assessed by The Kingdom of Spain or any political subdivision or authority thereof or therein having power to tax, provided that the Underwriters are resident for tax purposes in a State with which The Kingdom of Spain has concluded a Tax Treaty |
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| for the Avoidance of Double Taxation which provides for a full exemption from Spanish taxes on business profits and are fully entitled to the benefits of said Tax Treaty and provided that (i) the Underwriters do not operate through a permanent establishment in Spain or through a non-cooperative jurisdiction for Spanish tax purposes (in the terms of the Second Additional Provision of Law 36/2006, of 29 November, on prevention measures and actions against tax fraud, as amended through Law 11/2021, of 9 July, and as amended and restated from time to time) and (ii) they provide the Bank, before the relevant payment is due or paid (whichever occurs first), with a valid certificate of tax residence which expressly states that each such Underwriter is resident for tax purposes in the relevant jurisdiction within the meaning of the applicable Tax Treaty for the Avoidance of Double Taxation (or, as the case may be, the equivalent document regulated under the order which further develops the applicable Tax Treaty for the Avoidance of Double Taxation) which is generally valid for one year from its date of issue. For the avoidance of doubt, if any of these conditions is not met by an Underwriter, the Bank will be entitled to deduct any withholding on account of income taxes applicable pursuant to law on the Underwriting Commissions payable to that Underwriter, and no additional amounts will be paid by the Bank in such a case to that Underwriter. |
| (c) | The Underwriters are not authorized to give any information or to make any representation in connection with the offering or sale of the Securities other than such information or representations consistent with the Time of Sale Prospectus and the Prospectus or otherwise approved in writing by the Bank. |
| (d) | Solely for the purposes of the requirements of Article 9(8) of the MIFID Product Governance rules under the EU Delegated Directive 2017/593 (the “EU Product Governance Rules”) regarding the mutual responsibilities of manufacturers under the EU Product Governance Rules: (a) each of Goldman Sachs Bank Europe SE and the Bank (each, a “EU Manufacturer” and together the “EU Manufacturers”) acknowledges to the other EU Manufacturer that it understands the responsibilities conferred upon it under the Product Governance Rules relating to each of the product approval process, the target market and the proposed distribution channels as applying to the Securities and the related information set out in the Prospectus in connection with the Securities, and (b) the other parties to this Agreement note the application of the EU Product Governance Rules and acknowledge the target and distribution channels identified as applying to the Securities by the EU Manufacturers and the related information set out in the Prospectus in connection with the Securities. |
| (e) | Solely for the purposes of the requirements of 3.2.7R of the FCA Handbook Product Intervention and Product Governance Sourcebook (the “UK MiFIR Product Governance Rules”) regarding the mutual responsibilities of manufacturers under the UK MiFIR Product Governance Rules: (a) each of the Bank and Goldman Sachs Bank Europe SE (each a “UK Manufacturer” and together the “UK Manufacturers”) acknowledges to each other UK Manufacturer that it understands the responsibilities conferred upon it under the UK MiFIR Product Governance Rules relating to each of the product approval process, the target market and the proposed distribution channels as applying to the Securities and the related information set out in the Prospectus in connection with the Securities; and (b) the other parties to this Agreement note the |
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| application of the UK MiFIR Product Governance Rules and acknowledge the target market and distribution channels identified as applying to the Securities by the UK Manufacturers and the related information set out in the Prospectus in connection with the Securities. |
| 3. | Delivery and Payment. The global certificates for the Securities to be purchased by the Underwriters hereunder shall be delivered by or on behalf of (and at the expense of) the Bank to or upon the order of Santander Investment Securities Inc. for the accounts of the several Underwriters against payment by the Underwriters of the purchase price therefor by wire transfer of immediately available funds, payable to or upon the order of the Bank, at the offices of Linklaters LLP at 1290 Avenue of the Americas, New York, NY 10104, at 10:00 a.m. New York time, on May 24, 2022 or such later date (not later than ten business days thereafter) as the Representatives shall designate, which date and time may be postponed by agreement among the Representatives and the Bank (such date and time of delivery and payment for the Securities being herein called the “Closing Date”). Payment for the Securities shall be made against delivery to the Representatives for the respective accounts of the several Underwriters of the Securities registered in such names and in such denominations as the Representatives shall request in writing not later than two full business days prior to the date of delivery, with any transfer taxes payable in connection with the transfer of the Securities to the Representatives duly paid by the Bank. The Bank agrees that delivery of the Securities will be made on the Closing Date through the book-entry facilities of The Depository Trust Company (the “Depositary”). Upon issuance, all Securities will be represented by one or more global certificates registered in the name of a nominee of the Depositary. |
| 4. | Covenants and Agreements. The Bank agrees with each Underwriter that: |
| (a) | The Bank shall prepare and furnish to each Underwriter, without charge, a conformed copy of the Registration Statement (including exhibits thereto and documents incorporated by reference therein) in a form approved by the Representatives, and will promptly furnish the Underwriters during the period mentioned in Section 4(d) or 4(e) below with copies of the Time of Sale Prospectus, the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto or to the Registration Statement, in such quantities as the Underwriters may from time to time reasonably request, and will not publish any amendment or supplement to the Registration Statement, the Time of Sale Prospectus or the Prospectus unless they have furnished a copy to the Representatives for review and, except as required by law, will not publish any such proposed amendment or supplement to which the Representatives reasonably object. If at any time prior to completion of the distribution of the Securities (as determined by the Representatives) any event occurs as a result of which the Registration Statement, the Time of Sale Prospectus or the Prospectus as then amended or supplemented would contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Bank will promptly so notify the Representatives and will prepare and furnish to the Representatives, subject to prior review as provided above, a reasonable number of copies of an amendment or supplement to the Registration Statement, the Time of Sale Prospectus or the Prospectus which will correct such statement or omission. |
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| (b) | The Bank shall furnish to each Underwriter a copy of each proposed free writing prospectus to be prepared by or on behalf of, used by, or referred to by the Bank and not to use or refer to any proposed free writing prospectus to which an Underwriter reasonably objects. |
| (c) | Except as otherwise contemplated pursuant to this Agreement, the Bank shall not take any action that would result in an Underwriter or the Bank being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would not have been required to file thereunder. |
| (d) | If the Time of Sale Prospectus is being used to solicit offers to buy the Securities at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus in order to make the statements therein, in the light of the circumstances, not misleading, or if any event shall occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information contained in the Registration Statement then on file, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to any dealer upon request, either amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not, in the light of the circumstances when the Time of Sale Prospectus is delivered to a prospective purchaser, be misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or supplemented, will comply with applicable law. |
| (e) | If, during such period after the first date of the public offering of the Securities as in the opinion of counsel for the Underwriters the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses you will furnish to the Bank) to which Securities may have been sold by you on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law. |
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| (f) | The Bank shall endeavor to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Underwriters shall reasonably request. |
| (g) | The Bank shall make generally available to the Bank’s security holders and to the Representatives as soon as practicable an earnings statement covering a period of at least twelve months after the effective date of the Registration Statement which shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder. |
| (h) | If the third anniversary of the initial effective date of the Registration Statement occurs before all the Securities have been sold by the Underwriters, prior to the third anniversary, the Bank shall file a new shelf registration statement and take any other action necessary to permit the public offering of the Securities to continue without interruption; references herein to the Registration Statement shall include the new registration statement declared effective by the Commission. |
| (i) | The Bank shall prepare final term sheets relating to the offering of the Securities, containing only information that describes the final terms of the Securities or the offering in a form consented to by the Representatives and included herein as Exhibit D, and to file such final term sheets within the period required by Rule 433(d)(5)(ii) under the Securities Act following the date the final terms have been established for the offering of the Securities. |
| (j) | The Bank will use its reasonable efforts to effect, on or as soon as practicable after the Closing Date, and in no event more than 45 days following the Closing Date, the authorization of the Securities for listing on the New York Stock Exchange, Inc. (the “NYSE”), subject only to official notice of issuance. For so long as any of the Securities are outstanding, the Bank will use its commercially reasonable efforts to maintain the listing of the Securities, and will prepare, submit, furnish and publish (as appropriate) all such documents, instruments, information, advertisements and undertakings as may be necessary or advisable for such purposes. |
| (k) | The Bank will use its best efforts to ensure that the Securities qualify as debt instruments (instrumentos de deuda) under the First Additional Provision of Law 10/2014. |
| (l) | The Bank will use its best efforts to ensure that the public deed in respect of the Securities and disbursement minutes in respect of the Securities, if required, are registered in the Mercantile Registry of Cantabria within one month of the Closing Date. |
| (m) | The Bank will use its best efforts to comply at all times with the applicable requirements set out under Law 10/2014 in order to benefit from the tax treatment described in the First Additional Provision of Law 10/2014. |
| (n) | From the date hereof and continuing to and including the Closing Date, the Bank will not, without the Representatives’ prior written consent (which consent shall not be unreasonably withheld), offer, sell, contract to sell or otherwise dispose of in the United States any material amount of dollar-denominated debt securities issued or guaranteed by the Bank which both mature more than one year after such Closing Date and which are substantially similar to the Securities, except for the Bank’s customary deposit-raising activities. |
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| (o) | The Bank confirms that this Agreement has been executed and delivered in the name of the Bank by a signatory authorized by the Executive Committee of the Bank and agrees that the Securities will be executed and delivered in the name of the Bank, manually or via facsimile, by a signatory authorized by the Executive Committee of the Bank. |
| 5. | Conditions to the Obligations of the Underwriters. The obligation of the several Underwriters to purchase and pay for the Securities they have agreed to purchase hereunder on the Closing Date is subject to the accuracy of the representations and warranties of the Bank contained herein as of the date of this Agreement, at 3:50p.m., New York City time, on May 16, 2022 or such other time as agreed by the Bank and the Representatives (the “Time of Sale”) and the Closing Date, to the accuracy of the statements of the Bank made in any certificates pursuant to the provisions hereof delivered prior to or concurrently with such purchase, to the performance by the Bank of their obligations hereunder, and to the following further conditions: |
| (a) | Each of the Underwriters, Davis Polk & Wardwell LLP, U.S. counsel for the Bank, and Linklaters LLP, U.S. counsel for the Underwriters, shall have completed their respective diligence investigations in accordance with procedures customary for a transaction such as the offering of the Securities pursuant to the terms and conditions of this Agreement. |
| (b) | At the Closing Date, (i) since the date of the latest balance sheet included or incorporated by reference in the Time of Sale Prospectus and the Prospectus, there shall not have been any material adverse change (other than as set forth in or contemplated in the Time of Sale Prospectus or the Prospectus) in the financial condition or in the earnings, affairs or business prospects of the Bank and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business; (ii) the Bank shall have complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date; and (iii) the representations and warranties of the Bank set forth in Section 1 shall be accurate in all material respects as though expressly made at and as of the Closing Date. At the Closing Date, the Representatives shall have received a certificate, dated as of the Closing Date, from the Bank signed by the principal financial or accounting officer of the Bank, certifying, the matters set forth in clauses (i), (ii) and (iii) of this Section 5(b). |
| (c) | At the Closing Date, the Representatives shall have received a signed opinion, dated as of the Closing Date, of the internal counsel to the Bank, substantially in the form set forth in Exhibit A. |
| (d) | At the Closing Date, the Representatives shall have received a signed opinion, dated as of the Closing Date, of Uría Menéndez Abogados, S.L.P., Spanish counsel to the Bank, substantially in the form set forth in Exhibit B. |
| (e) | At the Closing Date, the Representatives shall have received a signed opinion, dated as of the Closing Date, of Davis Polk & Wardwell LLP, U.S. counsel to the Bank, substantially in the form set forth in Exhibit C. |
| (f) | At the Closing Date, the Representatives shall have received a signed opinion, dated as of the Closing Date, of Linklaters, S.L.P., Spanish counsel to the Underwriters, as to such matters as the Representatives may reasonably request. |
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| (g) | At the Closing Date, the Representatives shall have received a signed opinion, dated as of the Closing Date, of Linklaters LLP, U.S. counsel to the Underwriters, as to such matters as the Representatives may reasonably request. |
| (h) | On the date hereof, the Representatives shall have received from PricewaterhouseCoopers Auditores, S.L. a letter dated such date, to the effect that (i) it is an independent accountant with respect to the Bank and its subsidiaries within the meaning of the Securities Act; (ii) it is its opinion that the Financial Statements included or incorporated by reference in the Time of Sale Prospectus and the Prospectus and covered by its opinion therein comply as to form in all material respects, except as stated in such report, with the applicable accounting requirements of the Securities Act for foreign private issuers; (iii) nothing has come to its attention that any Financial Statements included or incorporated by reference in the Time of Sale Prospectus and the Prospectus and not covered by its opinion do not comply as to form in all material respects with the accounting requirements of the Securities Act for foreign private issuers; (iv) based upon limited procedures set forth in detail in such letter, nothing has come to its attention which causes it to believe that at a specified date not more than three business days prior to the date of such letter, there was any decrease in the capital stock, as compared with the amounts shown in the most recent consolidated balance sheet included or incorporated by reference in the Time of Sale Prospectus and the Prospectus; and (v) in addition to the examination referred to in its opinion and the limited procedures referred to in clause (iv) above, it has carried out certain specified procedures, not constituting an audit, with respect to certain amounts, percentages and financial information which are included in the Time of Sale Prospectus and the Prospectus and which are specified by the Representatives, and has found such amounts, percentages and financial information to be in agreement with the relevant accounting, financial and other records of the Bank and its subsidiaries identified in such letter. At the Closing Date, the Representatives shall have received a letter from PricewaterhouseCoopers Auditores, S.L., dated as of the Closing Date, confirming the information given in its letter dated the date of the Time of Sale Prospectus and the Prospectus. |
| (i) | The Securities shall be eligible for clearance and settlement through the Depositary. |
| (j) | If any of the conditions specified in this Section 5 shall not have been fulfilled when and as required by this Agreement to be fulfilled, this Agreement may be terminated by the Representatives on notice to the Bank at any time at or prior to the Closing Date, as the case may be, and such termination shall be without liability of any party to any other party except as provided in Section 6 herein. Notwithstanding any such termination, the provisions of Sections 7, 8, 9, 13 and 14 herein shall remain in effect. |
| 6. | Payment of Expenses. |
| (a) | The Bank will, except as set forth in subsection (b) below, pay and bear all costs and expenses incident to the performance of the Bank’s obligations under this Agreement, including (i) the preparation and filing of the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, or used by or referred to by the Bank, and any amendments |
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| or supplements to any of the foregoing, including the filing fees payable to the Commission relating to the Securities (within the time required by Rule 456(b)(1), if applicable), (ii) the preparation and distribution of this Agreement and the Indenture, (iii) the preparation and delivery of the Securities, (iv) the fees and disbursements of the counsel and accountants for the Bank (other than the cost of the comfort letters provided by PricewaterhouseCoopers Auditores, S.L., dated as of the Time of Sale and the Closing Date), (v) the costs and charges of the Trustee incurred in connection with the transactions contemplated in this Agreement, (vi) all costs and expenses incurred by the Bank in connection with any road show conducted in connection with the transaction contemplated by this Agreement, and (vii) all initial and on-going expenses and listing fees in connection with the listing of the Securities on the NYSE. |
| (b) | Notwithstanding subsection (a) above, each Underwriter, individually and not jointly, agrees to pay severally on a pro rata basis (i) the fees and disbursements of U.S. and Spanish counsels to the Underwriters, (ii) the cost of the comfort letters provided by PricewaterhouseCoopers Auditores, S.L., dated as of the Time of Sale and the Closing Date, and (iii) all costs and expenses incurred by the Underwriters in connection with any road show conducted in connection with the transaction contemplated by this Agreement. For the avoidance of doubt, no Underwriter will be liable for any initial or on-going expenses after payment has been made in accordance with this Section 6 and each amount identified in this Section 6(b) (i), (ii) and (iii) above will be divided pro rata among each Underwriter. |
| 7. | Indemnification. |
| (a) | The Bank agrees to indemnify and hold harmless each Underwriter and its directors, officers, employees and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each affiliate of any Underwriter within the meaning of Rule 405 under the Securities Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereto, any preliminary prospectus, the Time of Sale Prospectus, the Prospectus (or any amendment or supplement to the Time of Sale Prospectus or the Prospectus), any free writing prospectus, any road show slides used in a road show conducted in connection with the transaction contemplated by this Agreement or any Supplemental Offering Materials, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever, based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Bank, which consent shall not be unreasonably withheld; and (iii) against any and all expense whatsoever, as incurred (including fees and disbursements of counsel chosen by the Underwriters), reasonably incurred in investigating, preparing or defending |
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| against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under clause (i) or (ii) above; provided, however, that this indemnity does not apply to any loss, liability, claim, damage or expense to the extent arising out of an untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information furnished in writing to the Bank by the Underwriters expressly for use in the Time of Sale Prospectus or the Prospectus (or any amendment or supplement to the Time of Sale Prospectus or the Prospectus), any free writing prospectus, any road show slides used in a road show conducted in connection with the transaction contemplated by this Agreement or any Supplemental Offering Materials (it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 16 hereof). |
| (b) | Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Bank, and its directors, officers and each person, if any, who controls the Bank, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 7(a), as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Time of Sale Prospectus and the Prospectus (or any amendment or supplement to the Time of Sale Prospectus and the Prospectus), any free writing prospectus, any road show slides used in a road show conducted in connection with the transaction contemplated by this Agreement or any Supplemental Offering Materials, in each case in reliance upon and in conformity with information furnished in writing to the Bank by such Underwriter expressly for use in the Time of Sale Prospectus and the Prospectus (or any amendment or supplement to the Time of Sale Prospectus and the Prospectus), any free writing prospectus, any road show slides used in a road show conducted in connection with the transaction contemplated by this Agreement or any Supplemental Offering Materials (it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 16 hereof). |
| (c) | Each indemnified party shall give prompt notice to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying party or parties be liable for the fees and expenses of more than one counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. |
| 8. | Contribution. In order to provide for just and equitable contribution in circumstances under which the indemnity provided for in Section 7 is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms, the Bank, on the one hand, and the Underwriters, on the other hand, shall contribute to the aggregate losses, liabilities, |
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| claims, damages and expenses of the nature contemplated by such indemnity incurred by the Bank and the Underwriters, as incurred, in such proportions that (a) the Underwriters are responsible for that portion represented by the percentage that the total discounts and commissions received by the Underwriters bears to the aggregate offering price of the Securities and (b) the Bank is responsible for the balance; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as an Underwriter, and each director of the Bank and each person, if any, who controls the Bank within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Bank. The Underwriters’ respective obligations to contribute pursuant to this Section 8 are several in proportion to the aggregate principal amount of the Securities set forth opposite their respective names in Schedule I hereto and not joint. |
| 9. | Representations and Indemnities to Survive. The representations, warranties, indemnities, agreements and other statements of the Underwriters and the Bank and their officers set forth in or made pursuant to this Agreement will remain operative and in full force and effect regardless of any investigation made by or on behalf of the Bank or the Underwriters or controlling persons and will survive delivery of and payment for the Securities. |
| 10. | Termination of Agreement. |
| (a) | The Representatives may terminate this Agreement, by notice to the Bank, at any time at or prior to the Closing Date (i) if there has been, since the date hereof, any material adverse change (otherwise than as set forth in or contemplated by the Time of Sale Prospectus or the Prospectus) in the financial condition or in the earnings, business affairs or business prospects of the Bank and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if, since the execution and delivery of this Agreement (A) there has occurred any outbreak or escalation of hostilities or other calamity or crisis, including, without limitation, an act of terrorism, the effect of which on the financial markets of the United States are such as to make it, in the judgment of the Representatives, impracticable or inadvisable to market the Securities or (B) trading in any securities of the Bank has been suspended by the Commission, the Spanish Securities Market Commission (Comisión Nacional del Mercado de Valores) or the NYSE, or if trading generally on the NYSE or in the over-the-counter market has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required by such exchange or by order of the Commission, or any other governmental authority, or (C) a banking moratorium has been declared by Spanish, U.S. or New York authorities, or (D) there has occurred any change or any development involving a prospective change in national or international political, financial or economic conditions or exchange controls which, in the judgment of the Representatives, is likely to have a material adverse effect on the market for the Securities, or (E) any rating of the Bank’s debt securities shall have been lowered by Moody’s Investors Service Inc., Fitch Ratings Ltd. or Standard & Poor’s Ratings Services, a division of The McGraw-Hill Company, Inc., or |
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| any of such rating agencies have publicly announced it has under surveillance or review with possible negative implications any rating of the Bank’s debt securities (provided, however, that this clause (E) shall not apply if a lowering of any such rating or any such public announcement occurs as a result of the lowering of any rating by any such rating agency of obligations of The Kingdom of Spain or as a result of a public announcement by any such rating agency that it has under surveillance or review with possible negative implications obligations of The Kingdom of Spain), or (F) there has occurred a material disruption in commercial banking or securities settlement or clearance services in the United States or with respect to the Depositary. The Representatives agree that they will notify the Bank of the occurrence of any event described in clauses (A) through (F) as soon as they shall become aware of such occurrence. |
| (b) | If this Agreement is terminated pursuant to this Section 10, such termination shall be without liability of any party to any other party, except to the extent provided in Section 6. Notwithstanding any such termination, the provisions of Sections 6, 7, 8, 9, 13 and 14 shall remain in effect. |
| 11. | Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if delivered, mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representatives at the following addresses: |
Barclays Capital Inc.
745 Seventh Avenue
New York, NY 10019
Attn: Syndicate Registration
Fax: 646-834-8133
Goldman Sachs Bank Europe SE
Marienturm, Taunusanlage 9-10,
D-60329 Frankfurt am Main
Germany
Telephone: +49 69 7532 1000
Attn: Syndicate Desk
Email: [email protected]
RBC Capital Markets, LLC
Brookfield Place
200 Vesey Street, 8th Floor
New York, NY 10281
Attention: DCM Transaction Management
Fax: (212) 428-6308
Santander Investment Securities Inc.
45 East 53rd Street
19
New York, NY 10022
Attention: Debt Capital Markets
Facsimile: +1 (212) 407-0930
TD Securities (USA) LLC
1 Vanderbilt Avenue, 11th Floor
New York, NY 10017
Attention: Transaction Management Group
Email: [email protected]
Wells Fargo Securities, LLC
550 S Tyron Street, 5th Floor
Charlotte, NC 28202
Attention: Transaction Management
Facsimile: 704-410-0326
Email: [email protected]
Notices to the Bank shall be directed to them at:
Grupo Santander, S.A.
Ciudad Grupo Santander
Avda. Cantabria s/n
Edificio Encinar, planta 1
28660 Boadilla del Monte
Madrid
Spain
Attention: División Financiera
Fax: +34 91 257 2059
| 12. | Parties. This Agreement is made solely for the benefit of the Underwriters and the Bank and, to the extent expressed, any person controlling the Bank or the Underwriters, and their respective executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. The term “successors and assigns” shall not include any purchaser, as such purchaser, from the Underwriters of the Securities. |
| 13. | Submission to Jurisdiction. The Bank irrevocably agrees that any suit, action or proceeding against the Bank brought by the Underwriters or by any person who controls the Underwriters, arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in any state or federal court in the Borough of Manhattan, The City of New York, New York, and, to the extent permitted by law, irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, and irrevocably submits to the nonexclusive jurisdiction of such courts in any such suit, action or proceeding. The Bank has irrevocably appointed Banco Santander, S.A., New York Branch as its Authorized Agent (the “Authorized Agent”) upon whom process may be served in any such suit, action or proceeding arising out of or based on this Agreement or the transactions contemplated hereby which may be instituted in any state or federal court in the Borough of Manhattan, The City of New York, New York, by the Underwriters or by any person who controls the Underwriters and |
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| the Bank each expressly consents to the jurisdiction of any such court in respect of any such suit, action or proceeding, and waives any other requirements of or objections to personal jurisdiction with respect thereto. The Bank represents and warrants that the Authorized Agent has agreed to act as said agent for service of process, and the Bank each agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent and written notice of such service to the Bank, as the case may be, shall be deemed, in every respect, effective service of process upon the Bank. Notwithstanding the foregoing, any suit, action or proceeding based on this Agreement may be instituted by an Underwriter in any competent court in The Kingdom of Spain. |
| 14. | Judgment Currency. The Bank agrees to indemnify each of the Underwriters against any loss incurred by the Underwriters as a result of any judgment or order being given or made for any amount due hereunder and such judgment or order being expressed and paid in a currency (the “Judgment Currency”) other than U.S. dollars and as a result of any variation as between (i) the rate of exchange at which the U.S. dollar amount is converted into the Judgment Currency for the purpose of such judgment or order and (ii) the rate of exchange at which each Underwriter is able to purchase U.S. dollars with the amount of the Judgment Currency actually received by each Underwriter. The foregoing indemnity shall constitute a separate and independent obligation of each Underwriter and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The parties hereto agree that, to the fullest extent permitted by law, the “rate of exchange” used shall be the rate at which, in accordance with normal banking procedures, each Underwriter could purchase such Judgment Currency in The City of New York on the business day preceding that on which final judgment is given. The term “rate of exchange” shall include any premiums and costs of exchange payable in connection with the purchase of, or conversion into, the relevant currency. |
| 15. | Default by One of the Underwriters. If any Underwriter or Underwriters default in their obligations to purchase Securities hereunder on the Closing Date and the aggregate number of Securities that such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total number of Securities that the Underwriters are obligated to purchase on the Closing Date, the Underwriters may make arrangements satisfactory to the Bank for the purchase of such Securities by other persons, including any of the Underwriters, but if no such arrangements are made by the Closing Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Securities that such defaulting Underwriters agreed but failed to purchase on the Closing Date. If any Underwriter or Underwriters so default and the aggregate number of Securities with respect to which such default or defaults occur exceeds 10% of the total number of Securities that the Underwriters are obligated to purchase on the Closing Date and arrangements satisfactory to the Underwriters and the Bank for the purchase of such Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the Bank, except as provided in Sections 7 and 8. As used in this Agreement, the term “Underwriter” includes any person substituted for an Underwriter under this Section 15. Nothing herein will relieve a defaulting Underwriter from liability for its default. |
21
| 16. | Underwriters’ Information. Each of the Bank and the Underwriters acknowledge and agree, for the purposes of this Agreement, that the only information that the Underwriters have furnished to the Bank expressly for use in the Registration Statement, the Time of Sale Prospectus and the Prospectus (or any amendment or supplement to the Time of Sale Prospectus or the Prospectus), free writing prospectuses or any Supplemental Offering Materials are the respective names of the Underwriters and the information set forth under the heading “Underwriting (Conflicts of Interest) — Stabilization Transactions and Short Sales” in the Time of Sale Prospectus and the Prospectus. |
| 17. | Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. |
| 18. | Recognition of bail-in. Notwithstanding any other term of this Agreement or any other agreements, arrangements, or understanding between the Bank and the Underwriters, each Underwriter acknowledges, accepts, and agrees to be bound by, to the extent that the relevant exercise of the Bail-in Power by the Relevant Resolution Authority is permitted by the law and regulation applicable in Spain: |
| (a) | the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority in relation to any BRRD Liability of the Bank to such Underwriter under this Agreement, that (without limitation) may include and result in any of the following, or some combination thereof: (1) the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon; (2) the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the Bank or another person, and the issue to or conferral on such Underwriter of such shares, securities or obligations; (3) the cancellation of the BRRD Liability; and (4) the amendment or alteration of any interest, if applicable, thereon, the maturity, or the dates on which any payments are due, including by suspending payment for a temporary period; and |
| (b) | the variation of the terms of this Agreement, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of the Bail-in Power by the Relevant Resolution Authority. |
As used in this Section 18:
“BRRD” means Directive 2014/59/EU of the European Parliament and of the Council of May 15, 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms, as amended or replaced from time to time.
“BRRD Liability” means any liability, commitment, duty, responsibility or other obligation arising from, or related to, the Agreement which may be subject to the exercise of the Bail-in Power by the Relevant Resolution Authority.
“Law 11/2015” means Law 11/2015, of June 18, for the recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperacion y resolucion de entidades de credito y empresas de servicios de inversion), as amended from time to time.
“Regulated Entity” means any entity to which Law 11/2015 applies as provided under article 1.2 of Law 11/2015, as amended from time to time, which includes certain credit institutions, investment firms, and certain of their parent or holding companies.
22
“Relevant Resolution Authority” means the Spanish Fund for the Orderly Restructuring of Banks, the European Single Resolution Board, as the case may be, according to Law 11/2015, and any other entity with the authority to exercise the Bail-in Power from time to time.
“Bail-in Power” means any write-down, conversion, transfer, modification, or suspension power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in The Kingdom of Spain, relating to (i) the transposition of BRRD, including but not limited to Law 11/2015 and Royal Decree 1012/2015 dated November 6, by virtue of which Law 11/2015 is developed and Royal Decree 2606/1996, dated December 20, on credit entities’ deposit guarantee fund is amended (“Royal Decree 1012/2015”) (ii) the SRM Regulation and (iii) the instruments, rules and standards created thereunder, pursuant to which any obligation of a Regulated Entity (as defined above) (or other affiliate of such Regulated Entity) can be reduced, cancelled, modified, or converted into shares, other securities, or other obligations of such Regulated Entity or any other person (or suspended for a temporary period).
“SRM Regulation” means Regulation (EU) No. 806/2014 of the European Parliament and of the Council of July 15, 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of the Single Resolution Mechanism and the Single Resolution Fund and amending Regulation (EU) No. 1093/2010, as amended or replaced from time to time.
| 19. | Recognition of the U.S. Special Resolution Regimes. In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Underwriting Agreement, and any interest and obligation in or under this Underwriting Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Underwriting Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States. In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Underwriting Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States. |
As used in this Section 19:
“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
23
| 20. | Compliance with USA PATRIOT Act. In accordance with the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Bank, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients. |
| 21. | Counterparts. This Agreement may be executed in one or more counterparts and, when a counterpart has been executed by each party, all such counterparts taken together shall constitute one and the same agreement. Delivery of an executed Agreement by one party to any other party may be made by facsimile, electronic mail (including any electronic signature complying with the New York Electronic Signatures and Records Act (N.Y. State Tech. §§ 301-309), as amended from time to time, or other applicable law) or other transmission method, and the parties hereto agree that any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes |
| 22. | Entire Agreement; Amendment. This Agreement supersedes all prior agreements and undertakings, both written and oral, of the parties hereto, or any of them, with respect to the subject matter hereof and constitute the entire understanding of the parties hereto with respect to the subject matter hereof. This Agreement may not be waived, amended or modified except in writing signed by each party to be bound hereby. |
24
If the foregoing is in accordance with the Underwriters’ understanding of our agreement, please sign and return to us a counterpart hereof, whereupon this instrument will become a binding agreement between the Bank and the Underwriters in accordance with its terms.
Very truly yours,
| BANCO SANTANDER, S.A. | ||
| By | /s/ Juan Urigoen Irusta | |
| Name: Juan Urigoen Irusta | ||
| Title: Authorized Signatory | ||
[The rest of this page is intentionally left blank]
The foregoing Agreement is hereby confirmed and accepted as of the date first written above.
| BARCLAYS CAPITAL INC. | ||
| By | /s/ Kenneth Chang | |
| Name: Kenneth Chang | ||
| Title: Managing Director | ||
UA Signature Page for Barclays Capital Inc.
| GOLDMAN SACHS BANK EUROPE SE | ||
| By | /s/ Angelo Diotisalvi | |
| Name: Angelo Diotisalvi | ||
| Title: Managing Director | ||
| By | /s/ Rafael Kellermann | |
| Name: Rafael Kellermann | ||
| Title: Executive Director | ||
UA Signature Page for Goldman Sachs Bank Europe SE
| RBC CAPITAL MARKETS, LLC | ||
| By | /s/ Scott G. Primrose | |
| Name: Scott G. Primrose | ||
| Title: Authorized Signatory | ||
UA Signature Page for RBC Capital Markets, LLC.
| SANTANDER INVESTMENT SECURITIES INC. | ||
| By | /s/ Kerrin Black | |
| Name: Kerrin Black | ||
| Title: Managing Director | ||
| By | /s/ Victor Caputo | |
| Name: Victor Caputo | ||
| Title: Vice President | ||
UA Signature Page for Santander Investment Securities Inc.
| TD SECURITIES (USA) LLC | ||
| By | /s/ Luz Lanfredi | |
| Name: Luz Lanfredi | ||
| Title: Director | ||
UA Signature Page for TD Securities (USA) LLC
| WELLS FARGO SECURITIES, LLC | ||
| By | /s/ Carolyn Hurley | |
| Name: Carolyn Hurley | ||
| Title: Managing Director | ||
UA Signature Page for Wells Fargo Securities, LLC
SCHEDULE I
| Name of Underwriter |
Principal Amount of U.S.$1,500,000,000 3.892% Senior Preferred Fixed Rate Notes due 2024 |
|||
| Barclays Capital Inc. |
$ | 189,000,000 | ||
| Goldman Sachs Bank Europe SE |
$ | 189,000,000 | ||
| RBC Capital Markets, LLC |
$ | 189,000,000 | ||
| Santander Investment Securities Inc. |
$ | 450,000,000 | ||
| TD Securities (USA) LLC |
$ | 189,000,000 | ||
| Wells Fargo Securities, LLC |
$ | 189,000,000 | ||
| American Veterans Group, PBC. |
$ | 15,000,000 | ||
| Banco de Sabadell, S.A. |
$ | 15,000,000 | ||
| Blaylock Van, LLC |
$ | 15,000,000 | ||
| Caixa – Banco de Investimento, S.A. |
$ | 15,000,000 | ||
| CIBC World Markets Corp. |
$ | 15,000,000 | ||
| Scotia Capital (USA) Inc. |
$ | 15,000,000 | ||
| UBS Securities LLC |
$ | 15,000,000 | ||
|
|
|
|||
| Total |
$ | 1,500,000,000 | ||
|
|
|
|||
| Name of Underwriter |
Principal Amount of U.S.$650,000,000 Senior Preferred Floating Rate Notes due 2024 |
|||
| Barclays Capital Inc. |
$ | 81,600,000 | ||
| Goldman Sachs Bank Europe SE |
$ | 81,600,000 | ||
| RBC Capital Markets, LLC |
$ | 81,600,000 | ||
| Santander Investment Securities Inc. |
$ | 195,800,000 | ||
| TD Securities (USA) LLC |
$ | 81,600,000 | ||
| Wells Fargo Securities, LLC |
$ | 81,600,000 | ||
| American Veterans Group, PBC. |
$ | 6,600,000 | ||
| Banco de Sabadell, S.A. |
$ | 6,600,000 | ||
| Blaylock Van, LLC |
$ | 6,600,000 | ||
| Caixa – Banco de Investimento, S.A. |
$ | 6,600,000 | ||
| CIBC World Markets Corp. |
$ | 6,600,000 | ||
| Scotia Capital (USA) Inc. |
$ | 6,600,000 | ||
| UBS Securities LLC |
$ | 6,600,000 | ||
|
|
|
|||
| Total |
$ | 650,000,000 | ||
|
|
|
|||
Schedule I-1
EXHIBIT A
FORM OF OPINION OF INTERNAL COUNSEL
A-1
EXHIBIT B
FORM OF OPINION OF URÍA MENÉNDEZ ABOGADOS, S.L.P.
B-1
EXHIBIT C
FORM OF OPINION OF DAVIS POLK & WARDWELL LLP
C-1
EXHIBIT D
PRICING TERM SHEETS
PRICING TERM SHEET
U.S.$1,500,000,000 3.892% SENIOR PREFERRED FIXED RATE NOTES DUE 2024 (THE “SENIOR PREFERRED
FIXED NOTES”)
| Issuer: | Banco Santander, S.A. | |
| Series Number: | 153 | |
| Issuer Ratings*: | [***] | |
| Expected Notes Ratings*: | [***] | |
| Status: | Senior Preferred | |
| Principal Amount: | U.S.$1,500,000,000 | |
| Form of Issuance: | SEC Registered | |
| Pricing Date: | May 16, 2022 | |
| Settlement Date**: | May 24, 2022 (T+6) | |
| Maturity Date: | May 24, 2024 | |
| Benchmark Treasury: | T 2.500% due April 30, 2024 | |
| Benchmark Treasury Yield: | 2.592% | |
| Spread to Benchmark Treasury: | T+ 130 bps | |
| Re-offer Yield: | 3.892% | |
| Coupon: | 3.892% per annum | |
| Price to Public: | 100.000% of the Principal Amount | |
| Underwriting Discount / Commission: | 0.15% | |
| Proceeds to Issuer (before Expenses): | 99.850% (U.S.$1,497,750,000) | |
| Expenses (excluding the Underwriting Discount / Commission): | U.S.$199,273.85 | |
| Net Proceeds (after Underwriting Discount / Commission and including Expenses): | U.S.$1,497,949,273.85 | |
| Interest Rate: | Fixed Rate – 3.892% per annum, payable semi-annually in arrears. | |
| Interest Payment Dates: | Each May 24 and November 24, commencing on November 24, 2022 up to and including the Maturity Date or any date of earlier redemption. | |
| Day Count Fraction: | 30/360 (following, unadjusted) | |
| Optional Early Redemption (Call): | Not Applicable | |
| Early Redemption for TLAC/MREL Disqualification Reasons: | Not Applicable | |
| Early Redemption for Taxation Reasons: | Applicable as specified in the prospectus supplement | |
| Substitution and Variation: | Applicable as specified in the prospectus supplement | |
| Business Days: | New York City, London and TARGET 2 | |
| Minimum Denominations / Multiples: | Minimum denominations of U.S.$200,000 and multiples of U.S.$200,000 in excess thereof | |
| Listing: | New York Stock Exchange | |
| Trustee and Principal Paying Agent and Calculation Agent: | The Bank of New York Mellon, London Branch | |
| Governing Law: | New York law, except that certain provisions of the Senior Preferred Fixed Notes and the Indenture related to the status of the Senior Preferred Fixed Notes shall be governed and construed in accordance with Spanish Law. | |
| Agreement to and acknowledgement of Statutory Bail-in: | By its acquisition of any Senior Preferred Fixed Notes, each holder (including each holder of beneficial interest in the Senior Preferred Fixed Notes) acknowledges, accepts, consents and agrees to be bound by the terms of the Senior Preferred Fixed Notes related to the exercise of the Spanish Bail-In Power. | |
| Risk Factors: | Investors should read the Risk Factors in the preliminary prospectus supplement dated May 16, 2022. | |
| U.S. Federal Income Tax Considerations: | For a discussion of the material U.S. federal income tax considerations for the ownership and disposition of the Senior Preferred Fixed Notes by U.S. investors, see “Taxation—U.S. Federal Income Tax Considerations” in the base prospectus. That discussion does not describe all of the tax consequences that may be relevant in the light of a U.S. investor’s particular circumstances. | |
| Selling Restrictions: | Canada, United Kingdom, Hong Kong, Italy, Japan, People’s Republic of China (excluding Hong Kong, Macau and Taiwan), Republic of Korea, Taiwan, Singapore, Switzerland and Australia. No publicity or marketing nor public offering which requires the registration of a prospectus in Spain. The Senior Preferred Fixed Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the EEA and in the United Kingdom, as per the preliminary prospectus supplement. | |
| Conflict of Interest: | Santander Investment Securities Inc. is a subsidiary of Banco Santander, S.A. Therefore, Santander Investment Securities Inc. is deemed to have a “conflict of interest” under FINRA Rule 5121 and, accordingly, the offering of the notes will comply with the applicable requirements of FINRA Rule 5121. | |
| CUSIP / ISIN: | 05971K AM1 / US05971KAM18 | |
| Sole Global Coordinator: | Santander Investment Securities Inc. | |
| Joint Bookrunners: | Barclays Capital Inc., Goldman Sachs Bank Europe SE, RBC Capital Markets, LLC, Santander Investment Securities Inc., TD Securities (USA) LLC and Wells Fargo Securities, LLC. | |
| Co-Leads: | American Veterans Group, PBC, Banco de Sabadell, S.A., Blaylock Van, LLC, Caixa—Banco de Investimento, S.A., CIBC World Markets Corp., Scotia Capital (USA) Inc. and UBS Securities LLC. | |
| * | Any ratings obtained will reflect only the views of the respective rating agency and should not be considered a recommendation to buy, sell or hold the Senior Preferred Fixed Notes. The ratings assigned by the rating agencies are subject to revision or withdrawal at any time by such rating agencies in their sole discretion. Each rating should be evaluated independently of any other rating. |
| ** | It is expected that delivery of the Senior Preferred Fixed Notes will be made against payment therefore on or about May 24, 2022, which is the sixth day following the date hereof (such settlement cycle being referred to as “T+6”). Under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended, trades in the secondary market are generally required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Senior Preferred Fixed Notes prior to the second business day prior to the settlement date will be required, by virtue of the fact that the Senior Preferred Fixed Notes initially settle in T+6, to specify an alternative settlement cycle at the time of any such trade to prevent failed settlement and should consult their own advisors. |
The issuer has filed a registration statement (including a base prospectus and a related preliminary prospectus supplement) with the U.S. Securities and Exchange Commission (SEC) for this offering. Before you invest, you should read the preliminary prospectus supplement, the base prospectus in that registration statement, and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by searching the SEC online database (EDGAR®) at www.sec.gov.
Alternatively, you may obtain a copy of the base prospectus and the preliminary prospectus supplement from Barclays Capital Inc. by calling toll free 1-888-603-5847, Goldman Sachs Bank Europe SE by calling toll free 1-866-471-2526, RBC Capital Markets, LLC by calling toll free 1-866-375-6829, Santander Investment Securities Inc. by calling toll free 1-855-403-3636, TD Securities (USA) LLC by calling toll free 1-855-495-9846 and Wells Fargo Securities, LLC by calling toll free 1-800-645-3751.
Capitalized terms used but not defined in this term sheet have the meanings set forth in the base prospectus as supplemented by the preliminary prospectus supplement.
The distribution of this term sheet and the offering of the securities to which this term sheet relates (the “Senior Preferred Fixed Notes”) may be restricted by law in certain jurisdictions and therefore persons into whose possession this term sheet comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions could result in a violation of the laws of any such jurisdiction.
EU PRIIPs Regulation / PROHIBITION OF SALES TO EEA RETAIL INVESTORS: The Senior Preferred Fixed Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (“EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (11) of Article 4(1) of MiFID II; (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, (the “IDD”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II ; or (iii) not a qualified investor as defined in the Prospectus Regulation. Consequently, no key information document is required by the Regulation (EU) No. 1286/2014 (the “EU PRIIPs Regulation”) for offering or selling the Senior Preferred Fixed Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Senior Preferred Fixed Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the EU PRIIPs Regulation.
UK PRIIPs Regulation / PROHIBITION OF SALES TO UK RETAIL INVESTORS: The Senior Preferred Fixed Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom (“UK”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No. 2017/565 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“EUWA”); or (ii) a customer within the meaning of the provisions of the FSMA and any rules or regulations made under the FSMA to implement IDD, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No. 600/2014 as it forms part of UK domestic law by virtue of the EUWA. Consequently, no key information document is required by Regulation (EU) No. 1286/2014 as it forms part of UK domestic law by virtue of the EUWA (the “UK PRIIPs Regulation”) for offering or selling the Senior Preferred Fixed Notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the Senior Preferred Fixed Notes or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.
MIFID II PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET – Solely for the purposes of each manufacturer’s product approval process, the target market assessment in respect of the Senior Preferred Fixed Notes has led to the conclusion that: (i) the target market for the Senior Preferred Fixed Notes is eligible counterparties and professional clients only, each as defined in MiFID II; and (ii) all channels for distribution of the Senior Preferred Fixed Notes to eligible counterparties and professional clients are appropriate. The target market assessment indicates that the Senior Preferred Fixed Notes are incompatible with the needs, characteristic and objectives of clients which are retail clients (as defined in MiFID II). Any person subsequently offering, selling or recommending the Senior Preferred Fixed Notes (a “distributor”) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Senior Preferred Fixed Notes (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.
UK MIFIR PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET – Solely for the purposes of each manufacturer’s product approval process, the target market assessment in respect of the Senior Preferred Fixed Notes has led to the conclusion that: (i) the target market for the Senior Preferred Fixed Notes is eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook (“COBS”), and professional clients only, as defined in the Regulation (EU) No. 600/2014 as it forms part of UK domestic law by virtue of EUWA (“UK MiFIR”); and (ii) all channels for distribution of the Senior Preferred Fixed Notes to eligible counterparties and professional clients are appropriate. The target market assessment indicates that the Senior Preferred Fixed Notes are incompatible with the needs, characteristic and objectives of clients which are retail clients (as defined in Regulation (EU) No 2017/565 as it forms part of the domestic law of the UK by virtue of the EUWA). Any person subsequently offering, selling or recommending the Senior Preferred Fixed Notes (a “distributor”) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to the FCA Handbook Product Intervention and Product Governance Sourcebook (the “UK MiFIR Product Governance Rules”) is responsible for undertaking its own target market assessment in respect of the Senior Preferred Fixed Notes (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.
This term sheet is not an offer of securities or investments for sale nor a solicitation of an offer to buy securities or investments in any jurisdiction where such offer or solicitation would be unlawful. No action has been taken that would permit an offering of the Senior Preferred Fixed Notes or possession or distribution of this term sheet in any jurisdiction where action for that purpose is required. Persons into whose possession this term sheet comes are required to inform themselves about and to observe any such restrictions.
PRICING TERM SHEET
U.S.$650,000,000 SENIOR PREFERRED FLOATING RATE NOTES DUE 2024 (THE “SENIOR PREFERRED FLOATING NOTES”)
| Issuer: | Banco Santander, S.A. | |
| Series Number: | 156 | |
| Issuer Ratings*: | [***] | |
| Expected Notes Ratings*: | [***] | |
| Status: | Senior Preferred | |
| Principal Amount: | U.S.$650,000,000 | |
| Form of Issuance: | SEC Registered | |
| Pricing Date: | May 16, 2022 | |
| Settlement Date**: | May 24, 2022 (T+6) | |
| Maturity Date: | May 24, 2024 | |
| Type of Interest Rate: | Floating Rate | |
| Base Rate: | USD Compounded SOFR, which is a compounded average of daily SOFR (the Secured Overnight Financing Rate) as determined for each quarterly Interest Period, in accordance with the formula specified in the preliminary prospectus supplement. | |
| Floating Interest Rate: | Base Rate plus the spread of 124 basis points per annum, payable quarterly in arrears for each quarterly Interest Period from, and including, the Settlement Date to, but excluding, the Maturity Date. | |
| Observation Period | In respect of each Interest Period, the period from, and including, the date five U.S. Government Securities Business Days preceding the first date in such Interest Period to, but excluding, the date five U.S. Government Securities Business Days preceding the Interest Payment Date for such Interest Period. | |
| Interest Payment Dates | Each February 24, May 24, August 24 and November 24, commencing on August 24, 2022 up to and including the Maturity Date or any date of earlier redemption. | |
| Interest Period | Each interest period will begin on (and include) an Interest Payment Date (or, in the case of the first interest period, May 24, 2022) and end on (but exclude) the following Interest Payment Date, or, in the case of the final interest period, the Maturity Date | |
| Price to Public: | 100.000% of the Principal Amount | |
| Underwriting Discount / Commission: | 0.15% | |
| Proceeds to Issuer (before Expenses): | 99.850% (U.S.$649,025,000) | |
| Expenses (excluding the Underwriting Discount / Commission): | U.S.$85,403.08 | |
| Net Proceeds (after Underwriting Discount / Commission and including Expenses): | U.S.$649,110,403.08 | |
| Day Count Fraction: | Actual/360 (Modified, following, adjusted) | |
| Optional Early Redemption (Call): | Not Applicable | |
| Early Redemption for TLAC/MREL Disqualification Reasons: | Not Applicable | |
| Early Redemption for Taxation Reasons: | Applicable as specified in the prospectus supplement | |
| Substitution and Variation: | Applicable as specified in the prospectus supplement | |
| Business Days: | New York City, London and TARGET 2 | |
| Minimum Denominations / Multiples: | Minimum denominations of U.S.$200,000 and multiples of U.S.$200,000 in excess thereof | |
| Listing: | New York Stock Exchange | |
| Trustee and Principal Paying Agent and Calculation Agent: | The Bank of New York Mellon, London Branch | |
| Governing Law: | New York law, except that certain provisions of the Senior Preferred Floating Notes and the Indenture related to the status of the Senior Preferred Floating Notes shall be governed and construed in accordance with Spanish Law. | |
| Agreement to and acknowledgement of Statutory Bail-in: | By its acquisition of any Senior Preferred Floating Notes, each holder (including each holder of beneficial interest in the Senior Preferred Floating Notes) acknowledges, accepts, consents and agrees to be bound by the terms of the Senior Preferred Floating Notes related to the exercise of the Spanish Bail-In Power. | |
| Risk Factors: | Investors should read the Risk Factors in the preliminary prospectus supplement dated May 16, 2022. | |
| U.S. Federal Income Tax Considerations: | For a discussion of the material U.S. federal income tax considerations for the ownership and disposition of the Senior Preferred Floating Notes by U.S. investors, see “Taxation—U.S. Federal Income Tax Considerations” in the base prospectus. That discussion does not describe all of the tax consequences that may be relevant in the light of a U.S. investor’s particular circumstances. | |
| Selling Restrictions: | Canada, United Kingdom, Hong Kong, Italy, Japan, People’s Republic of China (excluding Hong Kong, Macau and Taiwan), Republic of Korea, Taiwan, Singapore, Switzerland and Australia. No publicity or marketing nor public offering which requires the registration of a prospectus in Spain. The Senior Preferred Floating Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the EEA and in the United Kingdom, as per the preliminary prospectus supplement. | |
| Conflict of Interest: | Santander Investment Securities Inc. is a subsidiary of Banco Santander, S.A. Therefore, Santander Investment Securities Inc. is deemed to have a “conflict of interest” under FINRA Rule 5121 and, accordingly, the offering of the notes will comply with the applicable requirements of FINRA Rule 5121. | |
| CUSIP / ISIN: | 05971K AN9 / US05971KAN90 | |
| Sole Global Coordinator: | Santander Investment Securities Inc. | |
| Joint Bookrunners: | Barclays Capital Inc., Goldman Sachs Bank Europe SE, RBC Capital Markets, LLC, Santander Investment Securities Inc., TD Securities (USA) LLC and Wells Fargo Securities, LLC. | |
| Co-Leads: | American Veterans Group, PBC, Banco de Sabadell, S.A., Blaylock Van, LLC, Caixa—Banco de Investimento, S.A., CIBC World Markets Corp., Scotia Capital (USA) Inc. and UBS Securities LLC. | |
| * | Any ratings obtained will reflect only the views of the respective rating agency and should not be considered a recommendation to buy, sell or hold the Senior Preferred Floating Notes. The ratings assigned by the rating agencies are subject to revision or withdrawal at any time by such rating agencies in their sole discretion. Each rating should be evaluated independently of any other rating. |
| ** | It is expected that delivery of the Senior Preferred Floating Notes will be made against payment therefore on or about May 24, 2022, which is the sixth day following the date hereof (such settlement cycle being referred to as “T+6”). Under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended, trades in the secondary market are generally required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Senior Preferred Floating Notes prior to the second business day prior to the settlement date will be required, by virtue of the fact that the Senior Preferred Floating Notes initially settle in T+6, to specify an alternative settlement cycle at the time of any such trade to prevent failed settlement and should consult their own advisors. |
The issuer has filed a registration statement (including a base prospectus and a related preliminary prospectus supplement) with the U.S. Securities and Exchange Commission (SEC) for this offering. Before you invest, you should read the preliminary prospectus supplement, the base prospectus in that registration statement, and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by searching the SEC online database (EDGAR®) at www.sec.gov.
Alternatively, you may obtain a copy of the base prospectus and the preliminary prospectus supplement from Barclays Capital Inc. by calling toll free 1-888-603-5847, Goldman Sachs Bank Europe SE by calling toll free 1-866-471-2526, RBC Capital Markets, LLC by calling toll free 1-866-375-6829, Santander Investment Securities Inc. by calling toll free 1-855-403-3636, TD Securities (USA) LLC by calling toll free 1-855-495-9846 and Wells Fargo Securities, LLC by calling toll free 1-800-645-3751.
Capitalized terms used but not defined in this term sheet have the meanings set forth in the base prospectus as supplemented by the preliminary prospectus supplement.
The distribution of this term sheet and the offering of the securities to which this term sheet relates (the “Senior Preferred Floating Notes”) may be restricted by law in certain jurisdictions and therefore persons into whose possession this term sheet comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions could result in a violation of the laws of any such jurisdiction.
EU PRIIPs Regulation / PROHIBITION OF SALES TO EEA RETAIL INVESTORS: The Senior Preferred Floating Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (“EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (11) of Article 4(1) of MiFID II; (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, (the “IDD”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II ; or (iii) not a qualified investor as defined in the Prospectus Regulation. Consequently, no key information document is required by the Regulation (EU) No. 1286/2014 (the “EU PRIIPs Regulation”) for offering or selling the Senior Preferred Floating Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Senior Preferred Floating Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the EU PRIIPs Regulation.
UK PRIIPs Regulation / PROHIBITION OF SALES TO UK RETAIL INVESTORS: The Senior Preferred Floating Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom (“UK”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No. 2017/565 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“EUWA”); or (ii) a customer within the meaning of the provisions of the FSMA and any rules or regulations made under the FSMA to implement IDD, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No. 600/2014 as it forms part of UK domestic law by virtue of the EUWA. Consequently, no key information document is required by Regulation (EU) No. 1286/2014 as it forms part of UK domestic law by virtue of the EUWA (the “UK PRIIPs Regulation”) for offering or selling the Senior Preferred Floating Notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the Senior Preferred Floating Notes or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.
MIFID II PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET – Solely for the purposes of each manufacturer’s product approval process, the target market assessment in respect of the Senior Preferred Floating Notes has led to the conclusion that: (i) the target market for the Senior Preferred Floating Notes is eligible counterparties and professional clients only, each as defined in MiFID II; and (ii) all channels for distribution of the Senior Preferred Floating Notes to eligible counterparties and professional clients are appropriate. The target market assessment indicates that the Senior Preferred Floating Notes are incompatible with the needs, characteristic and objectives of clients which
are retail clients (as defined in MiFID II). Any person subsequently offering, selling or recommending the Senior Preferred Floating Notes (a “distributor”) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Senior Preferred Floating Notes (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.
UK MIFIR PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET – Solely for the purposes of each manufacturer’s product approval process, the target market assessment in respect of the Senior Preferred Floating Notes has led to the conclusion that: (i) the target market for the Senior Preferred Floating Notes is eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook (“COBS”), and professional clients only, as defined in the Regulation (EU) No. 600/2014 as it forms part of UK domestic law by virtue of EUWA (“UK MiFIR”); and (ii) all channels for distribution of the Senior Preferred Floating Notes to eligible counterparties and professional clients are appropriate. The target market assessment indicates that the Senior Preferred Floating Notes are incompatible with the needs, characteristic and objectives of clients which are retail clients (as defined in Regulation (EU) No 2017/565 as it forms part of the domestic law of the UK by virtue of the EUWA). Any person subsequently offering, selling or recommending the Senior Preferred Floating Notes (a “distributor”) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to the FCA Handbook Product Intervention and Product Governance Sourcebook (the “UK MiFIR Product Governance Rules”) is responsible for undertaking its own target market assessment in respect of the Senior Preferred Floating Notes (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.
This term sheet is not an offer of securities or investments for sale nor a solicitation of an offer to buy securities or investments in any jurisdiction where such offer or solicitation would be unlawful. No action has been taken that would permit an offering of the Senior Preferred Floating Notes or possession or distribution of this term sheet in any jurisdiction where action for that purpose is required. Persons into whose possession this term sheet comes are required to inform themselves about and to observe any such restrictions.
EXHIBIT E
| 1. | The Final Term Sheets included in Exhibit D. |
E-1
Exhibit 4.1
BANCO SANTANDER, S.A.
as Issuer,
THE BANK OF NEW YORK MELLON,
London Branch
as Trustee, Calculation Agent and Principal Paying Agent
and
THE BANK OF NEW YORK MELLON SA/NV,
Luxembourg Branch
as Senior Preferred Debt Securities Registrar
THIRD SUPPLEMENTAL INDENTURE
dated as of May 24, 2022
to
SENIOR PREFERRED DEBT SECURITIES INDENTURE
dated as of June 30, 2021
THIRD SUPPLEMENTAL INDENTURE (“Third Supplemental Indenture”), dated as of May 24, 2022, among BANCO SANTANDER, S.A., a sociedad anónima incorporated under the laws of The Kingdom of Spain (the “Company”), having its principal executive office located at Ciudad Grupo Santander, Avenida de Cantabria s/n, 28660 Boadilla del Monte, Madrid, Spain, as Issuer, THE BANK OF NEW YORK MELLON, London Branch, a banking corporation duly organized and existing under the laws of the State of New York, as trustee (the “Trustee,” which term includes any successor Trustee), calculation agent (the “Calculation Agent,” which term includes any successor Calculation Agent) and principal paying agent (the “Principal Paying Agent,” which term includes any successor Principal Paying Agent), having its Corporate Trust Office at One Canada Square, London, E14 5AL, United Kingdom, and THE BANK OF NEW YORK MELLON SA/NV, Luxembourg Branch, a société anonyme/naamloze vennootschap, incorporated under the laws of Belgium, as senior preferred debt securities registrar (the “Senior Preferred Debt Securities Registrar”), having its principal office at 2-4 Rue Eugène Ruppert, L-2453 Luxembourg, Luxembourg.
WITNESSETH
WHEREAS, the Company and the Trustee have executed and delivered a Senior Preferred Debt Securities Indenture dated as of June 30, 2021 (as heretofore supplemented and amended, the “Base Indenture” and, the Base Indenture, as supplemented and amended by this Third Supplemental Indenture, the “Senior Preferred Debt Securities Indenture”), to provide for the issuance of the Company’s senior preferred debt securities (the “Senior Preferred Debt Securities”), including the Senior Preferred Notes (as defined below).
WHEREAS, Section 9.01(d) of the Base Indenture permits the Company and the Trustee to change or eliminate any provisions of the Base Indenture without the consent of Holders, subject to certain conditions;
WHEREAS, Section 9.01(f) of the Base Indenture permits the Company and the Trustee to enter into a supplemental indenture to establish the forms or terms of Senior Preferred Debt Securities of any series as permitted under Sections 2.01 and 3.01 of the Base Indenture without the consent of Holders;
WHEREAS, there are no Outstanding Senior Preferred Debt Securities of any series created prior to the execution of this Third Supplemental Indenture that are entitled to the benefit of the provisions set forth herein or that would be adversely affected by such provisions;
WHEREAS, the Executive Committee of the Company has authorized the entry into this Third Supplemental Indenture and the establishment of the Senior Preferred Notes (as defined below), as required by Section 9.01 of the Base Indenture;
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WHEREAS, the parties hereto desire to establish (i) a series of Senior Preferred Debt Securities to be known as the Series 153 3.892% Senior Preferred Fixed Rate Notes due 2024 (the “Fixed Rate Notes”) and (ii) a series of Senior Preferred Debt Securities to be known as the Series 156 Senior Preferred Floating Rate Notes due 2024 (the “Floating Rate Notes” and together with the Fixed Rate Notes, the “Senior Preferred Notes”), each pursuant to Sections 2.01 and 3.01 of the Base Indenture. Each of the Fixed Rate Notes and the Floating Rate Notes may be issued from time to time and any Fixed Rate Notes and Floating Rate Notes issued as part of the relevant series created herein will constitute a single series of Senior Preferred Debt Securities under the Senior Preferred Debt Securities Indenture and shall be included in the definition of “Fixed Rate Notes” or “Floating Rate Notes”, as applicable, where the context requires;
WHEREAS, the Company has requested and hereby requests that the Trustee execute and deliver this Third Supplemental Indenture and the Company has provided the Trustee with an Executive Committee Resolution authorizing the execution of this Third Supplemental Indenture;
WHEREAS, all actions required by the Company to be taken in order to make this Third Supplemental Indenture a valid, binding and enforceable instrument in accordance with its terms, have been taken and performed, and the execution and delivery of this Third Supplemental Indenture has been duly authorized in all respects; and
WHEREAS, where indicated, this Third Supplemental Indenture shall amend and supplement the Base Indenture; and to the extent that the terms of the Base Indenture are inconsistent with such provisions of this Third Supplemental Indenture, the terms of this Third Supplemental Indenture shall govern.
NOW, THEREFORE, the Company and the Trustee mutually covenant and agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definition of Terms. For all purposes of this Third Supplemental Indenture:
(a) a term defined anywhere in this Third Supplemental Indenture has the same meaning throughout;
(b) capitalized terms used herein but not otherwise defined shall have the meanings assigned to them in the Base Indenture;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect interpretation; and
(e) for the purposes of this Third Supplemental Indenture and the Base Indenture, the term “series” shall mean a series of the Senior Preferred Debt Securities.
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ARTICLE 2
FORM OF SENIOR PREFERRED NOTES
Section 2.01. Terms of the Fixed Rate Notes. The following terms relating to the Fixed Rate Notes are hereby established pursuant to Section 3.01 of the Base Indenture:
(a) The title of the Fixed Rate Notes shall be designated as: the Series 153 3.892% Senior Preferred Fixed Rate Notes due 2024;
(b) The price at which the Fixed Rate Notes shall be issued is 100.000% of the principal amount thereof;
(c) The aggregate principal amount of the Fixed Rate Notes that may be authenticated and delivered under the Senior Preferred Debt Securities Indenture shall not exceed $1,500,000,000, except as otherwise provided in the Senior Preferred Debt Securities Indenture, including Section 2.01(t) hereof;
(d) Principal on the Fixed Rate Notes shall be payable on May 24, 2024;
(e) The Fixed Rate Notes shall be issued in global registered form on May 24, 2022. From (and including) the date of issuance to (and excluding) the Maturity Date, interest on the Fixed Rate Notes will be payable at a fixed rate of 3.892% per annum. Interest will be payable semi-annually in arrears on May 24 and November 24 each year (each, a “Fixed Interest Payment Date”), commencing on November 24, 2022, up to and including the Maturity Date or any date of earlier redemption;
Interest on the Fixed Rate Notes will be calculated on the basis of a 360-day year consisting of twelve 30-day months and, in the case of an incomplete month, on the basis of the actual number of days elapsed in such month. The Regular Record Dates for the Fixed Rate Notes will be 15 calendar days immediately preceding the relevant Fixed Interest Payment Date, whether or not a Business Day. If any scheduled Fixed Interest Payment Date is not a Business Day, the Company will pay interest on the next Business Day, but interest on that payment will not accrue during the period from and after the scheduled Fixed Interest Payment Date. If the scheduled maturity date or date of redemption or repayment is not a Business Day, the Company may pay interest and principal on the next succeeding Business Day, but interest on that payment will not accrue during the period from and after the scheduled maturity date or date of redemption or repayment;
(f) No premium, upon redemption or otherwise, shall be payable by the Company on the Fixed Rate Notes;
(g) Principal of and any interest on the Fixed Rate Notes shall be paid to the Holder through The Bank of New York Mellon, as paying agent of the Company having offices in London, United Kingdom and the Borough of Manhattan, The City of New York;
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(h) The Fixed Rate Notes shall not be redeemable except as provided in Article 11 of the Senior Preferred Debt Securities Indenture;
(i) The Company shall have no obligation to redeem or purchase the Fixed Rate Notes pursuant to any sinking fund or analogous provision;
(j) The Fixed Rate Notes shall be issued only in minimum denominations of $200,000 and integral multiples of $200,000 in excess thereof;
(k) The principal amount of the Fixed Rate Notes shall be payable, subject to the conditions set forth in Section 3.07 hereto, upon the declaration of acceleration thereof pursuant to Section 5.02 of the Senior Preferred Debt Securities Indenture;
(l) Additional Amounts in respect of the Fixed Rate Notes shall be payable as set forth in the Senior Preferred Debt Securities Indenture;
(m) The Fixed Rate Notes shall be denominated in, and payments thereon shall be made in, U.S. Dollars only;
(n) The payment of principal of or interest, if any, on the Fixed Rate Notes shall be payable only in the coin or currency in which the Fixed Rate Notes are denominated;
(o) The Fixed Rate Notes will be issued in the form of one or more global securities in registered form, without coupons attached, and initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, the Depositary;
(p) The Fixed Rate Notes will not be initially issued in definitive form;
(q) The Events of Default on the Fixed Rate Notes are as provided for in the Senior Preferred Debt Securities Indenture;
(r) The Company agrees with respect to the Fixed Rate Notes and each Holder of the Fixed Rate Notes, by his or her acquisition of the Fixed Rate Notes will be deemed to have agreed to the ranking as described in Section 2.02 of the Senior Preferred Debt Securities Indenture. Each such Holder will be deemed to have irrevocably waived his or her rights of priority which would otherwise be accorded to him or her under the laws of Spain, to the extent necessary to effectuate the ranking provisions of the Fixed Rate Notes. In addition, each Holder of the Fixed Rate Notes by his or her acquisition of such Fixed Rate Notes authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the ranking of such Fixed Rate Notes as provided in the Senior Preferred Debt Securities Indenture, and appoints the Trustee as his or her attorney-in-fact for any and all such purposes;
(s) The form of the Fixed Rate Notes to be issued on the date hereof shall be substantially in the form of Exhibit A hereto;
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(t) The Company may issue additional Fixed Rate Notes (“Additional Fixed Rate Notes”) after the date hereof having the same ranking and same interest rate, maturity date, redemption terms and other terms, except for the price to the public, original interest accrual date, issue date and first Fixed Interest Payment Date, as the Fixed Rate Notes; provided, however, that such Additional Fixed Rate Notes will not have the same CUSIP, ISIN or other identifying number as the outstanding Fixed Rate Notes unless the Additional Fixed Rate Notes are fungible with the Fixed Rate Notes for U.S. federal income tax purposes. Any such Additional Fixed Rate Notes, together with the Fixed Rate Notes, will constitute a single series of securities under the Senior Preferred Debt Securities Indenture;
(u) The Company appoints The Bank of New York Mellon, London Branch, as the Principal Paying Agent for the Fixed Rate Notes. There is no Calculation Agent for the Fixed Rate Notes;
(v) The Company appoints The Bank of New York Mellon SA/NV, Luxembourg Branch, as the Senior Preferred Debt Securities Registrar for the Fixed Rate Notes pursuant to Section 3.05 of the Base Indenture;
(w) If (i) a TLAC/MREL Disqualification Event or (ii) a tax event that would entitle the Company to redeem the Fixed Rate Notes as set forth in Section 11.08 of the Base Indenture, occurs and is continuing, the Company may substitute all (but not some) of the Fixed Rate Notes or modify the terms of all (but not some) of the Fixed Rate Notes as provided for in Section 8.04 of the Senior Preferred Debt Securities Indenture;
(x) Subject to applicable law, neither any Holder or beneficial owner of the Fixed Rate Notes nor the Trustee acting on behalf of the Holders of the Fixed Rate Notes may exercise, claim or plead any right of set-off, netting, compensation or retention in respect of any amount owed to it by the Company in respect of, or arising under, or in connection with, the Fixed Rate Notes as provided for in Section 5.15 of the Senior Preferred Debt Securities Indenture;
(y) Each Holder of the Fixed Rate Notes acknowledges, accepts, consents to and agrees to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority as provided for in Article 12 of the Senior Preferred Debt Securities Indenture; and
(z) The Bank of New York Mellon SA/NV, Luxembourg Branch, as the Senior Preferred Debt Securities Registrar for the Fixed Rate Notes acknowledges, accepts, consents to and agrees to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority as provided for in Article 12 of the Senior Preferred Debt Securities Indenture.
Section 2.02. Terms of the Floating Rate Notes. The following terms relating to the Floating Rate Notes are hereby established pursuant to Section 3.01 of the Base Indenture:
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(a) The title of the Floating Rate Notes shall be designated as: the Series 156 Senior Preferred Floating Rate Notes due 2024;
(b) The price at which the Floating Rate Notes shall be issued is 100.000% of the principal amount thereof;
(c) The aggregate principal amount of the Floating Rate Notes that may be authenticated and delivered under the Senior Preferred Debt Securities Indenture shall not exceed $650,000,000, except as otherwise provided in the Senior Preferred Debt Securities Indenture, including Section 2.02(v) hereof;
(d) Principal on the Floating Rate Notes shall be payable on May 24, 2024;
(e) The Floating Rate Notes shall be issued in global registered form on May 24, 2022. From (and including) the date of issuance to (and excluding) the Maturity Date, the Floating Rate Notes will bear interest at a rate per annum equal to the Compounded SOFR plus 124 basis points, subject to a minimum interest rate of 0% (the “Floating Rate Interest Rate”). Interest will be payable quarterly in arrears on February 24, May 24, August 24, and November 24 of each year (each a “Floating Interest Payment Date”), commencing on August 24, 2022, up to and including the Maturity Date or any date of earlier redemption; provided, that if any scheduled Floating Interest Payment Date, other than the scheduled Maturity Date or date of redemption or repayment, would fall on a day that is not a Business Day, that Floating Interest Payment Date will be postponed to the next succeeding Business Day, except that if that Business Day falls in the next succeeding calendar month, the Floating Interest Payment Date will be the immediately preceding Business Day. The Regular Record Dates for the Floating Rate Notes will be 15 calendar days immediately preceding the relevant Floating Interest Payment Date. If the scheduled Maturity Date or date of redemption or repayment is not a Business Day, the Company will pay any interest and principal and/or any amount payable upon redemption of the Floating Rate Notes, as applicable, on the next succeeding Business Day, but such final Floating Interest Payment Date will not be postponed and interest on that payment will not accrue from and after the scheduled maturity date or date of redemption or repayment. Interest on the Floating Rate Notes shall be determined five U.S. Government Securities Business Days before each Floating Interest Payment Date;
(f) Each interest period on the Floating Rate Notes will begin on (and include) a Floating Interest Payment Date (or, in the case of the first interest period, May 24, 2022) and end on (but exclude) the following Floating Interest Payment Date, or, in the case of the final interest period, the Maturity Date (each an “Interest Period”);
(g) The amount of interest accrued and payable on the Floating Rate Notes for each Interest Period will be equal to the product of (i) the outstanding principal amount of the Floating Rate Notes multiplied by (ii) the product of (a) the interest rate for the relevant Interest Period multiplied by (b) the quotient of the actual number of calendar days in such Interest Period divided by 360;
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(h) No premium, upon redemption or otherwise, shall be payable by the Company on the Floating Rate Notes;
(i) Principal of and any interest on the Floating Rate Notes shall be paid to the Holder through The Bank of New York Mellon, as paying agent of the Company having offices in London, United Kingdom and the Borough of Manhattan, The City of New York;
(j) The Floating Rate Notes shall not be redeemable except as provided in Article 11 of the Senior Preferred Debt Securities Indenture;
(k) The Company shall have no obligation to redeem or purchase the Floating Rate Notes pursuant to any sinking fund or analogous provision;
(l) The Floating Rate Notes shall be issued only in minimum denominations of $200,000 and integral multiples of $200,000 in excess thereof;
(m) The principal amount of the Floating Rate Notes shall be payable, subject to the conditions set forth in Section 3.07 hereto, upon the declaration of acceleration thereof pursuant to Section 5.02 of the Base Indenture, as amended by Section 3.07 hereto;
(n) Additional Amounts in respect of the Floating Rate Notes shall be payable as set forth in the Senior Preferred Debt Securities Indenture;
(o) The Floating Rate Notes shall be denominated in, and payments thereon shall be made in, U.S. Dollars only;
(p) The payment of principal of or interest, if any, on the Floating Rate Notes shall be payable only in the coin or currency in which the Floating Rate Notes are denominated;
(q) The Floating Rate Notes will be issued in the form of one or more global securities in registered form, without coupons attached, and initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, the Depositary;
(r) The Floating Rate Notes will not be initially issued in definitive form;
(s) The Events of Default on the Floating Rate Notes are as provided for in the Senior Preferred Debt Securities Indenture;
(t) The Company agrees with respect to the Floating Rate Notes and each Holder of the Floating Rate Notes, by his or her acquisition of the Floating Rate Notes will be deemed to have agreed to the ranking as described in Section 2.02 of the Senior Preferred Debt Securities Indenture. Each such Holder will be deemed to have irrevocably waived
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his or her rights of priority which would otherwise be accorded to him or her under the laws of Spain, to the extent necessary to effectuate the ranking provisions of the Floating Rate Notes. In addition, each Holder of the Floating Rate Notes by his or her acquisition of such Floating Rate Notes authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the ranking of such Floating Rate Notes as provided in the Senior Preferred Debt Securities Indenture, and appoints the Trustee as his or her attorney-in-fact for any and all such purposes;
(u) The form of the Floating Rate Notes to be issued on the date hereof shall be substantially in the form of Exhibit B hereto;
(v) The Company may issue additional Floating Rate Notes (“Additional Floating Rate Notes”) after the date hereof having the same ranking and same interest rate, maturity date, redemption terms and other terms, except for the price to the public, original interest accrual date, issue date and first Floating Rate Interest Payment Date, as the Floating Rate Notes; provided, however, that such Additional Floating Rate Notes will not have the same CUSIP, ISIN or other identifying number as the outstanding Floating Rate Notes unless the Additional Floating Rate Notes are fungible with the Floating Rate Notes for U.S. federal income tax purposes. Any such Additional Floating Rate Notes, together with the Floating Rate Notes, will constitute a single series of securities under the Senior Preferred Debt Securities Indenture;
(w) The Company appoints The Bank of New York Mellon, London Branch, as the Principal Paying Agent for the Floating Rate Notes. The initial Calculation Agent for the Floating Rate Notes shall be The Bank of New York Mellon, London Branch pursuant to the terms of a calculation agency agreement dated as of the date hereof between The Bank of New York Mellon, London Branch and the Company (the “Calculation Agency Agreement”);
(x) The Company appoints The Bank of New York Mellon SA/NV, Luxembourg Branch, as the Senior Preferred Debt Securities Registrar for the Floating Rate Notes pursuant to Section 3.05 of the Base Indenture;
(y) If (i) a TLAC/MREL Disqualification Event or (ii) a tax event that would entitle the Company to redeem the Floating Rate Notes as set forth in Section 11.08 of the Base Indenture, occurs and is continuing, the Company may substitute all (but not some) of the Floating Rate Notes or modify the terms of all (but not some) of the Floating Rate Notes as provided for in Section 8.04 of the Senior Preferred Debt Securities Indenture;
(z) Subject to applicable law, neither any Holder or beneficial owner of the Floating Rate Notes nor the Trustee acting on behalf of the Holders of the Floating Rate Notes may exercise, claim or plead any right of set-off, netting, compensation or retention in respect of any amount owed to it by the Company in respect of, or arising under, or in connection with, the Floating Rate Notes as provided for in Section 5.15 of the Senior Preferred Debt Securities Indenture;
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(aa) Each Holder of the Floating Rate Notes acknowledges, accepts, consents to and agrees to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority as provided for in Article 12 of the Senior Preferred Debt Securities Indenture;
(ab) The Bank of New York Mellon SA/NV, Luxembourg Branch, as the Senior Preferred Debt Securities Registrar for the Floating Rate Notes acknowledges, accepts, consents to and agrees to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority as provided for in Article 12 of the Senior Preferred Debt Securities Indenture;
(ac) If the Company or its designee determine on or prior to the relevant SOFR Determination Time that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Compounded SOFR, then the provisions set forth below will thereafter apply to all determinations of the rate of interest payable on the Floating Rate Notes. For the avoidance of doubt, in accordance with the benchmark replacement provisions, after a Benchmark Transition Event and its related Benchmark Replacement Date have occurred, the interest payable for each Interest Period on the Floating Rate Notes will be an annual rate equal to the sum of the Benchmark Replacement and the applicable margin;
(1) If the Company or its designee determines on or prior to the relevant Reference Time that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred in respect of the then-current Benchmark, the Benchmark Replacement will replace the then-current Benchmark for all purposes relating to the Floating Rate Notes in respect of all determinations on such date and all determinations on all subsequent dates;
(2) In connection with the implementation of a Benchmark Replacement, the Company or its designee will have the right to make Benchmark Replacement Conforming Changes from time to time. No such change shall affect the Trustee’s or the Calculation Agent’s own rights, duties or immunities under the Base Indenture, the Calculation Agency Agreement or otherwise without their consent;
(3) Any determination, decision, election or calculation that may be made by the Company or its designee pursuant to the provisions described in this section, including any determination with respect to a rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error, will be made in the Company or the Calculation Agent’s sole discretion, and, notwithstanding anything to the contrary in the documentation relating to the Floating Rate Notes, shall become effective without consent from the Holders of the Floating Rate Notes or any other party;
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(4) In no event shall the Calculation Agent, the Trustee or any paying agent be responsible for making any such determination, decision, election or calculation; or have any responsibility to determine whether any manifest error has occurred, and, in the absence of notice from us, may conclusively assume that no manifest error exists and shall suffer no liability in in so assuming;
(ad) None of the Trustee, the Principal Paying Agent or the Calculation Agent (unless the Company is acting in such capacity) shall be under any obligation to: (i) monitor, determine or verify the unavailability or cessation of Compounded SOFR or SOFR, or whether or when there has occurred, or to give notice to any other transaction party of the occurrence of, any Benchmark Transition Event or related Benchmark Replacement Date, (ii) select, determine or designate any Benchmark Replacement, or other successor or replacement benchmark index, or whether any conditions to the designation of such a rate or index have been satisfied, (iii) select, determine or designate any Benchmark Replacement Adjustment, or other modifier to any replacement or successor index, or (iv) determine whether or what Benchmark Replacement Conforming Changes are necessary or advisable, if any, in connection with any of the foregoing, including, but not limited to, adjustments as to any alternative spread thereon, the business day convention, interest determination dates or any other relevant methodology applicable to such substitute or successor benchmark;
(ai) For the avoidance of doubt, in no event shall the Trustee, the Principal Paying Agent or the Calculation Agent be required to act as the Company’s designee for the purposes of determining if any Benchmark Transition Event has occurred, selecting any Benchmark Replacement or determining any Benchmark Replacement Adjustment unless such Trustee, the Principal Paying Agent or Calculation Agent agrees to such appointment in writing;
(aj) In connection with the foregoing, each of the Trustee, the Principal Paying Agent and the Calculation Agent shall be entitled to rely conclusively on any determinations made by the Company or its designee without independent investigation, and none will have any liability for actions taken at the Company’s direction in connection therewith; and
(ak) None of the Trustee, the Principal Paying Agent or the Calculation Agent shall be liable for any inability, failure or delay on its part to perform any of its duties set forth in this Third Supplemental Indenture as a result of the unavailability of SOFR, Compounded SOFR or other applicable Benchmark Replacement, including as a result of any failure, inability, delay, error or inaccuracy on the part of any other transaction party in providing any direction, instruction, notice or information required or contemplated by the terms of this Third Supplemental Indenture and reasonably required for the performance of such duties. None of the Trustee, the Principal Paying Agent or the Calculation Agent shall be responsible or liable for the Company’s actions or omissions or for those of the Company’s designee, or for any failure or delay in the performance by the Company or its designee, nor shall any of the Trustee, the Principal Paying Agent or the Calculation Agent be under any obligation to oversee or monitor the Company’s performance or that of the Company’s designee.
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ARTICLE 3
ADDITIONAL TERMS APPLICABLE TO THE SENIOR PREFERRED NOTES
Section 3.01. Addition of Definitions. With respect to the Senior Preferred Notes only, Section 1.01 of the Base Indenture is amended to include the following definitions (which shall be deemed to arise in Section 1.01 in their proper alphabetical order):
“Interest Payment Date” shall mean: (i) the Fixed Interest Payment Date with respect to the Fixed Rate Notes; or (ii) the Floating Interest Payment Date with respect to the Floating Rate Notes.
“Issue Date” means May 24, 2022, being the date of the initial issue of the Senior Preferred Notes.
“Maturity Date” means May 24, 2024.
“RD 1012/2015” means Royal Decree 1012/2015, of 6 November developing Law 11/2015, as amended or superseded from time to time.
Section. 3.02. Addition of Definitions. With respect to the Floating Rate Notes only, Section 1.01 of the Base Indenture is amended to include the following definitions (which shall be deemed to arise in Section 1.01 in their proper alphabetical order):
“Benchmark” means, initially, Compounded SOFR, as such term is defined above; provided that if the Company or its designee determine on or prior to the Reference Time that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Compounded SOFR (or the published daily SOFR used in the calculation thereof) or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement.
“Benchmark Replacement” means the first alternative set forth in the order below that can be determined by the Company or its designee as of the Benchmark Replacement Date:
| (1) | the sum of: (a) the alternate rate of interest that has been selected or recommended by the Relevant Governmental Body as the replacement for the then-current Benchmark for the applicable Corresponding Tenor and (b) the Benchmark Replacement Adjustment; |
| (2) | the sum of: (a) the ISDA Fallback Rate and (b) the Benchmark Replacement Adjustment; or |
| (3) | the sum of: (a) the alternate rate of interest that has been selected by the Company or its designee as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to any industry-accepted rate of interest as a replacement for the then-current Benchmark for U.S. dollar denominated floating rate notes at such time and (b) the Benchmark Replacement Adjustment. |
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“Benchmark Replacement Adjustment” means the first alternative set forth in the order below that can be determined by the Company or its designee as of the Benchmark Replacement Date:
| (1) | the spread adjustment, or method for calculating or determining such spread adjustment (which may be a positive or negative value or zero) that has been selected or recommended by the Relevant Governmental Body for the applicable Unadjusted Benchmark Replacement; |
| (2) | if the applicable Unadjusted Benchmark Replacement is equivalent to the ISDA Fallback Rate, then the ISDA Fallback Adjustment; or |
| (3) | the spread adjustment (which may be a positive or negative value or zero) that has been selected by the Company or its designee giving due consideration to any industry-accepted spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the then-current Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar denominated floating rate notes at such time. |
For the avoidance of doubt, the Benchmark Replacement Adjustment for the applicable Benchmark Replacement Date may be selected, recommended or determined on a day other than such Benchmark Replacement Date.
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definitions of “Interest Period” and “Observation Period”, timing and frequency of determining rates and making payments of interest, rounding of amounts or tenors, and other administrative matters) that the Company or its designee decide may be appropriate to reflect the adoption of such Benchmark Replacement in a manner substantially consistent with market practice (or, if the Company or its designee decide that adoption of any portion of such market practice is not administratively feasible or if the Company or its designee determine that no market practice for use of the Benchmark Replacement exists, in such other manner as the Company or its designee determine is reasonably necessary).
“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark (including the daily published component used in the calculation thereof):
| (1) | in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of the Benchmark permanently or indefinitely ceases to provide the Benchmark (or such component); or |
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| (2) | in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein. |
For the avoidance of doubt, if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination.
“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark (including the daily published component used in the calculation thereof):
| (1) | a public statement or publication of information by or on behalf of the administrator of the Benchmark (or such component) announcing that such administrator has ceased or will cease to provide the Benchmark (or such component), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark (or such component); |
| (2) | a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark (or such component), the central bank for the currency of the Benchmark (or such component), an insolvency official with jurisdiction over the administrator for the Benchmark (or such component), a resolution authority with jurisdiction over the administrator for the Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for the Benchmark (or such component), which states that the administrator of the Benchmark (or such component) has ceased or will cease to provide the Benchmark (or such component) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark (or such component); or |
| (3) | a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark announcing that the Benchmark is no longer representative. |
“Compounded SOFR” means a compounded average of daily SOFR, that will be determined by the Calculation Agent in respect of any Interest Period in accordance with the following formula, with the resulting percentage being rounded, if necessary, to the fifth decimal place, with 0.000005 being rounded upwards:
Where:
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“d” means, in respect of the relevant Observation Period, the number of calendar days in such Observation Period;
“d0” means, in respect of any Observation Period, the number of U.S. Government Securities Business Days in the relevant Observation Period;
“i” means a series of whole numbers from one to d0, each representing the relevant U.S. Government Securities Business Days in chronological order from, and including, the first U.S. Government Securities Business Day in the relevant Observation Period;
“ni” means, in respect of any U.S. Government Securities Business Dayi, in the relevant Observation Period the number of calendar days from, and including, such U.S. Government Securities Business Dayi up to, but excluding, the following U.S. Government Securities Business Day;
“SOFRi” means, in respect of any U.S. Government Securities Business Dayi in the relevant Observation Period, the SOFR in respect of such U.S. Government Securities Business Day;
“Corresponding Tenor” with respect to a Benchmark Replacement means a tenor (including overnight) having approximately the same length (disregarding business day adjustment) as the applicable tenor for the then-current Benchmark.
“ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time.
“ISDA Fallback Adjustment” means the spread adjustment, which may be a positive or negative value or zero, that would apply for derivatives transactions referencing the ISDA Definitions to be determined upon the occurrence of an index cessation event with respect to the Benchmark for the applicable tenor.
“ISDA Fallback Rate” means the rate that would apply for derivatives transactions referencing the ISDA Definitions to be effective upon the occurrence of an index cessation date with respect to the Benchmark for the applicable tenor excluding the applicable ISDA Fallback Adjustment.
“Observation Period” means, in respect of an Interest Period, the period from, and including, the date falling the number of Observation Shift Days prior to the first day of such Interest Period and ending on, but excluding, the date that is the number of Observation Shift Days prior to the Floating Interest Payment Date for such Interest Period.
“Observation Shift Days” means five U.S. Government Securities Business Days.
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“Reference Time” with respect to any determination of the Benchmark means (1) if the Benchmark is Compounded SOFR, the SOFR Determination Time, and (2) if the Benchmark is not Compounded SOFR, the time determined by the Company or its designee in accordance with the Benchmark Replacement Conforming Changes.
“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
“SOFR” means the rate determined by the Calculation Agent in respect of a U.S. Government Securities Business Day, in accordance with the following provisions:
(i) the Secured Overnight Financing Rate published for such U.S. Government Securities Business Day as such rate appears on the SOFR Administrator’s Website at 3:00 p.m. (New York time) on the immediately following U.S. Government Securities Business Day (the “SOFR Determination Time”);
(ii) if the rate specified in (i) above does not so appear, the Secured Overnight Financing Rate as published in respect of the first preceding U.S. Government Securities Business Day for which the Secured Overnight Financing Rate was published on the SOFR Administrator’s Website;
where:
“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the Secured Overnight Financing Rate); and
“SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, or any successor source.
“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
“U.S. Government Securities Business Day” means any day except for a Saturday, Sunday or a day on which the Securities Industry and Financial Markets Association (SIFMA) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
Section 3.03. Replacement of Definitions. With respect to the Senior Preferred Notes only, Section 1.01 of the Base Indenture is amended to replace in their entirety the following definitions:
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“Applicable Banking Regulations” means at any time the laws, regulations, requirements, guidelines and policies relating to capital adequacy, resolution and/or solvency including, among others, those giving effect to the MREL and the TLAC or any equivalent or successor principles, then applicable to the Company and/or the Group including, without limitation to the generality of the foregoing, the CRD IV, the BRRD, the SRM Regulation and those regulations, requirements, guidelines and policies relating to capital adequacy, resolution and/or solvency of the Regulator then applicable to the Company and/or the Group including, among others, those giving effect to the MREL and the TLAC or any equivalent or successor principles, in each case to the extent then in effect in the Kingdom of Spain (whether or not such regulations, requirements, guidelines or policies have the force of law and whether or not they are applied generally or specifically to the Company and/or the Group).
“Business Day” means any day, other than Saturday or Sunday, that is not a legal holiday nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in the City of New York or London nor a day when the Trans-European Automated Real-time Gross Settlement Express Transfer system (the “TARGET2 System”), or any successor thereto, is closed for business.
“CRR” means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on the prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012 or such other regulation as may come into effect in place thereof, as amended from time to time.
“Qualifying Notes” means, with respect to each series of Senior Preferred Debt Securities, at any time, any securities issued directly by the Company that have terms not otherwise materially less favorable to the holders of the Senior Preferred Debt Securities of such series than the terms of the Senior Preferred Debt Securities of such series, provided that such securities shall:
(i) contain terms which comply with the then current requirements for TLAC/MREL Eligible Instruments as embodied in the Applicable Banking Regulations;
(ii) carry the same rate of interest as the Senior Preferred Debt Securities of such series prior to the relevant substitution or variation pursuant to Section 8.04 of the Senior Preferred Debt Securities Indenture;
(iii) have the same denomination and aggregate outstanding principal amount as the Senior Preferred Debt Securities of such series prior to the relevant substitution or variation pursuant to Section 8.04 of the Senior Preferred Debt Securities Indenture;
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(iv) have the same date of maturity and the same dates for payment of interest as the Notes prior to the relevant substitution or variation pursuant to Section 8.04 of the Senior Preferred Debt Securities Indenture;
(v) have at least the same ranking as the Senior Preferred Debt Securities of such series;
(vi) not, immediately following such substitution or variation, be subject to (i) a TLAC/MREL Disqualification Event and/or (ii) a tax event that would entitle the Company to redeem the Senior Preferred Debt Securities of such series as set forth under Section 11.08 of the Senior Preferred Debt Securities Indenture; and
(vii) be listed or admitted to trading on any stock exchange as selected by the Company, if the Senior Preferred Debt Securities of such series were listed or admitted to trading on a stock exchange immediately prior to the relevant substitution or variation pursuant to Section 8.04 of the Senior Preferred Debt Securities Indenture.
“Regular Record Date” means the date that is 15 calendar days immediately preceding the relevant Interest Payment Date, whether or not a Business Day.
“SRM Regulation” means Regulation (EU) No. 806/2014 of the European Parliament and of the Council of 15 July 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of the Single Resolution Mechanism and the Single Resolution Fund and amending Regulation (EU) No. 1093/2010, as amended or replaced from time to time.
“Supervisory Permission” means, in relation to any action, such supervisory permission (or, as appropriate, waiver) from the Regulator as is required therefor under Applicable Banking Regulations.
“TLAC/MREL Disqualification Event” shall have occurred at any time that all or part of the outstanding nominal amount of a series of Senior Preferred Debt Securities does not fully qualify as TLAC/MREL Eligible Instruments of the Company and/or the Group, except where such non-qualification (i) is due solely to the remaining maturity of the Senior Preferred Debt Securities of such series being less than any period prescribed for TLAC/MREL Eligible Instruments by the Applicable Banking Regulations as at the issue date of the relevant series of Senior Preferred Debt Securities or (ii) is as a result of the Senior Preferred Debt Securities of such series being bought back by or on behalf of the Company or a buy back of the Senior Preferred Debt Securities of such series which is funded by or on behalf of the Company.
Section 3.04. Payment. Notwithstanding Section 3.07 of the Base Indenture, payments of interest, if any, and any Additional Amounts on the Senior Preferred Notes may be made by wire transfer of immediately available funds.
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Section 3.05. Deletion of Satisfaction and Discharge Provisions. With respect to the Senior Preferred Notes only, Article 4 of the Base Indenture is deleted in its entirety.
Section 3.06. Replacement of Provisions with Respect to Events of Default. With respect to the Senior Preferred Notes only, Section 5.01(a) of the Base Indenture is hereby replaced with the following:
Except as otherwise provided pursuant to Section 3.01, if any of the following events occurs and is continuing with respect to the Senior Preferred Debt Securities of any series, it shall constitute an “Event of Default”:
(i) Non-payment: default is made in the payment of any interest or principal due in respect of the Senior Preferred Debt Securities of that series or any of them and such default continues for a period of seven days (or such other period as may be specified pursuant to Section 3.01); or
(ii) Winding up: any order is made by any competent court or resolution passed for the winding up or liquidation of the Company (except in any such case for the purpose of reconstruction or amalgamation or a merger, spin-off or any other structural modification (modificación estructural), provided that any entity that survives or is created as a result of such merger, spin-off or other structural modification is given a rating by an internationally recognized rating agency at least equal to the then current rating of the Company at the time of such transaction).
Section 3.07. Replacement of Provisions with Respect to Acceleration of Maturity; Rescission and Annulment. With respect to the Senior Preferred Notes only, Section 5.02 of the Base Indenture is hereby replaced with the following:
Enforcement of Remedies. (a) If an Event of Default occurs as set forth in paragraph (a)(i) of Section 5.01, then the Trustee or the Holders of at least 25% in outstanding principal amount of the Senior Preferred Debt Securities of that series may institute proceedings for the winding up or liquidation of the Company but may take no further action in respect of such default.
If an Event of Default occurs as set forth in paragraph (a)(ii) of Section 5.01, then the Trustee or the Holders of at least 25% in outstanding principal amount of the Senior Preferred Debt Securities of that series may declare such Senior Preferred Debt Securities of such series immediately due and payable whereupon the Senior Preferred Debt Securities of such series shall, when permitted by applicable Spanish insolvency law, become immediately due and payable at their Early Termination Amount together with all interest (if any) accrued thereon.
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Without prejudice to paragraphs (a)(i) and (a)(ii) of Section 5.01, the Trustee or the holders of at least 25% in outstanding principal amount of the Senior Preferred Debt Securities of any series may at their discretion and without further notice, institute such proceedings against the Company as they may think fit to enforce any obligation, condition or provision binding on the Company under the Senior Preferred Debt Securities of such series, provided that, except as provided in Section 5.01(a)(ii) winding-up above, the Company shall not as a consequence of such proceedings be obliged to pay any sum or sums representing or measured by reference to principal or interest in respect of the Senior Preferred Debt Securities of such series sooner than the same would otherwise have been payable by it or any damages.
Section 3.08. Replacement of Provisions with Respect to Waiver of Right of Set-off. With respect to the Senior Preferred Notes only, Section 5.15 of the Base Indenture is hereby replaced with the following:
Waiver of Right of Set-off. Subject to applicable law, neither any Holder or beneficial owner of the Senior Preferred Debt Securities of any series, nor the Trustee acting on behalf of the Holders of the Senior Preferred Debt Securities of such series may exercise, claim or plead any right of set-off, netting, compensation or retention in respect of any amount owed to it by the Company in respect of, or arising under, or in connection with, the Senior Preferred Debt Securities of such series or this Senior Preferred Debt Securities Indenture and each Holder and beneficial owner of the Senior Preferred Debt Securities of such series, by virtue of its holding of any Senior Preferred Debt Securities of such series or any interest therein, and the Trustee acting on behalf of the Holders of the Senior Preferred Debt Securities of such series, shall be deemed to have waived all such rights of set-off, netting, compensation or retention. If, notwithstanding the above, any amounts due and payable to any Holder or beneficial owner of a Senior Preferred Debt Security of any series, or any interest therein by the Company in respect of, or arising under, the Senior Preferred Debt Securities of such series are discharged by set-off, such Holder or beneficial owner shall, subject to applicable law, immediately pay an amount equal to the amount of such discharge to the Company (or, if the event of any voluntary or involuntary liquidation of the Company shall have occurred, the liquidator or administrator of the Company, as the case may be) and, until such time as payment is made, shall hold an amount equal to such amount in trust (where possible) or otherwise for the Company (or the liquidator or administrator of the Company, as the case may be) and, accordingly, any such discharge shall be deemed not to have taken place.
Section 3.09. Replacement of Provisions with Respect to Substitution and Variation. With respect to the Senior Preferred Notes only, the first paragraph of Section 8.04 of the Base Indenture is hereby replaced with the following:
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Substitution and Variation. If (i) a TLAC/MREL Disqualification Event or (ii) a tax event that would entitle the Company to redeem the Senior Preferred Debt Securities of any series as set forth in Section 11.08 of the Base Indenture, occurs and is continuing, the Company may substitute all (but not some) of the Senior Preferred Debt Securities of any series or modify the terms of all (but not some) of the Senior Preferred Debt Securities of any series, without any requirement for the consent or approval of the holders of the Senior Preferred Debt Securities of any series, so that they are substituted for, or varied to, become, or remain, Qualifying Notes, subject to having given not less than 15 nor more than 30 days’ notice to the Holders of any series in accordance with Section 1.06 and to the Trustee (which notice shall be irrevocable and shall specify the date for substitution or, as applicable, variation), and subject to obtaining Supervisory Permission therefor, if and as required under Applicable Banking Regulations.
Section 3.10. [Reserved]
Section 3.11. Replacement of Provisions with Respect to Optional Redemption for Taxation Reasons. With respect to the Senior Preferred Notes only, Section 11.08 of the Base Indenture is hereby replaced with the following:
Optional Redemption for Taxation Reasons. If (i) as a result of any change in, or amendment to, the laws or regulations of Spain or of any political subdivision thereof or any authority or agency therein or thereof having power to tax or in the interpretation or administration of any such laws or regulations which becomes effective on or after the date of issue of the first issued Senior Preferred Debt Securities of such series, the Company shall determine that (a) the Company would be required to pay Additional Amounts pursuant to Section 10.04 or (b) the Company would not be entitled to claim a deduction in computing tax liabilities in Spain in respect of any interest to be paid on the next Interest Payment Date on such series of Senior Preferred Debt Securities or the value of such deduction to the Company would be materially reduced or (c) the applicable tax treatment of the Senior Preferred Debt Securities of such series changes in a material way that was not reasonably foreseeable at the issue date and (ii) such circumstances are evidenced by the delivery by the Company to the Trustee of a copy of the Supervisory Permission for the redemption, if and as required, the Company may, at its option and having given no less than 15 nor more than 30 days’ notice to the Holders of the Senior Preferred Debt Securities of such series in accordance with Section 11.04 (which notice shall be irrevocable) and a concurrent copy thereof to the Trustee, redeem in whole, but not in part, the Outstanding Senior Preferred Debt Securities of such series (in accordance with the requirements of Applicable Banking Regulations in force at the relevant time) at their early tax redemption amount (the “Early Redemption Amount (Tax)”) (which shall be their principal amount), together with any accrued interest thereon to (but excluding) the date fixed for redemption; provided, however, that (i) in the case of (i)(a) above, no such
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notice of redemption may be given earlier than 90 days prior to the earliest date on which the Company would be obliged to pay such Additional Amounts were a payment in respect of the Senior Preferred Debt Securities of such series then due and (ii) redemption due to changes in tax treatment pursuant to this Section 11.08 may only take place in accordance with Applicable Banking Regulations in force at the relevant time and subject to the Company obtaining Supervisory Permission therefor, if and as required.
Section 3.12. Replacement of Provisions with Respect to Repurchase of Senior Preferred Debt Securities. With respect to the Senior Preferred Notes only, Section 11.09 of the Base Indenture is hereby replaced with the following:
Repurchase of Senior Preferred Debt Securities. The Company and any of its subsidiaries or any third party designated by any of them, may at any time repurchase Senior Preferred Debt Securities of any series in the open market or otherwise and at any price; provided that the repurchase of the Senior Preferred Debt Securities of such series by the Company or any of its subsidiaries shall take place in accordance with Applicable Banking Regulations in force at the relevant time and will be subject to the prior consent of the Regulator and/or the Relevant Resolution Authority, if and as required.
Section 3.13. Deletion of Provisions with Respect to Optional Early Redemption (Call). With respect to the Senior Preferred Notes only, Section 11.10 of the Base Indenture is deleted in its entirety.
Section 3.14. Deletion of Provisions with Respect to Optional Early Redemption (Put). With respect to the Senior Preferred Notes only, Section 11.11 of the Base Indenture is deleted in its entirety.
Section 3.15. Deletion of Provisions with Respect to Optional Redemption for TLAC/MREL Disqualification Event. With respect to the Senior Preferred Notes only, Section 11.12 of the Base Indenture is deleted in its entirety.
ARTICLE 4
MISCELLANEOUS
Section 4.01. Effect of Supplemental Indenture. Upon the execution and delivery of this Third Supplemental Indenture by each of the Company and the Trustee, the Base Indenture shall be supplemented in accordance herewith, and this Third Supplemental Indenture shall form a part of the Base Indenture for all purposes in respect of the Senior Preferred Notes or otherwise as applicable.
Section 4.02. Confirmation of Indenture. The Senior Preferred Debt Securities Indenture, with respect to the Senior Preferred Notes or otherwise as applicable, is in all respects ratified and confirmed, and the Base Indenture, this Third Supplemental Indenture and all indentures supplemental thereto shall, in respect of the Senior Preferred
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Notes or otherwise as applicable, be read, taken and construed as one and the same instrument. This Third Supplemental Indenture constitutes an integral part of the Senior Preferred Debt Securities Indenture and, where applicable, with respect to the Senior Preferred Notes. In the event of a conflict between the terms and conditions of the Base Indenture and the terms and conditions of this Third Supplemental Indenture, the terms and conditions of this Third Supplemental Indenture shall prevail where applicable.
Section 4.03. Concerning the Trustee. The Trustee does not make any representations as to the validity, sufficiency or adequacy of this Third Supplemental Indenture or the Senior Preferred Notes. The recitals and statements herein and in the Senior Preferred Notes are deemed to be those of the Company and not the Trustee. In entering into this Third Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Base Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.
Section 4.04. Governing Law. The Senior Preferred Debt Securities Indenture and the Senior Preferred Notes shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the choice of law provisions), except for Section 2.02 of the Senior Preferred Debt Securities Indenture, Sections 2.01(r) and 2.02 (t) of this Third Supplemental Indenture and the status provisions of the Senior Preferred Notes, which shall be governed by and construed in accordance with the laws of the Kingdom of Spain, and except that the authorization and execution by the Company of the Senior Preferred Debt Securities Indenture and the Senior Preferred Notes shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of organization of the Company and the Trustee, as the case may be.
Section 4.05. Separability. In case any provision contained in this Third Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 4.06. Counterparts. This Third Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Third Supplemental Indenture and of signature pages by facsimile, e-mail or other electronic format (e.g., PDF, “tif” or “jpg”) transmission and other electronically imaged signatures (including, without limitation, DocuSign and AdobeSign) shall constitute effective execution and delivery of this Third Supplemental Indenture as to the parties hereto and may be used in lieu of the original Third Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile, e-mail or other electronic format (e.g., PDF, “tif” or “jpg”) shall be deemed to be their original signatures for all purposes. This Third Supplemental Indenture and any indenture supplemental hereto and any other document, certificate or opinion delivered in connection with this Third Supplemental Indenture, such supplemental indenture or the issuance and delivery of the Senior Preferred Debt Securities may be signed by or on behalf of the Company and the Trustee by manual, facsimile or pdf or other electronically imaged signature (including, without limitation, DocuSign and AdobeSign).
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Section 4.07. Electronic Means. The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Third Supplemental Indenture and related financing documents and delivered using e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder (collectively, the “Electronic Means”); provided, however, that the Company shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Company whenever a person is to be added or deleted from the listing. If the Company elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The Company understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Company shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the Company and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Company. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Company agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Company; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.
Section 4.08. Recognition of Bail-In. Notwithstanding and to the exclusion of any other term of this Third Supplemental Indenture or any other agreements, arrangements, or understanding between the Senior Preferred Debt Securities Registrar and the Company or any Holder, the Company and each Holder acknowledges and accepts that a BRRD Liability arising under this Third Supplemental Indenture may be subject to the exercise of Bail-in Powers by the Relevant Resolution Authority, and acknowledges, accepts, and agrees to be bound by:
23
(a) the effect of the exercise of Bail-in Powers by the Relevant Resolution Authority in relation to any BRRD Liability of the Senior Preferred Debt Securities Registrar to the Company or to any Holder under this Third Supplemental Indenture, that (without limitation) may include and result in any of the following, or some combination thereof:
(i) the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon;
(ii) the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the Senior Preferred Debt Securities Registrar or another person, and the issue to or conferral on the Company or on any Holder of such shares, securities or obligations;
(iii) the cancellation of the BRRD Liability;
(iv) the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period;
(b) the variation of the terms of this Third Supplemental Indenture, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of Bail-in Powers by the Relevant Resolution Authority in respect of the Senior Preferred Debt Securities Registrar.
Solely as used in this Section 4.08:
“Bail-in Legislation” means in relation to a member state of the European Economic Area which has implemented, or which at any time implements, the BRRD, the relevant implementing law, regulation, rule or requirement as described in the EU Bail-in Legislation Schedule from time to time.
“Bail-in Powers” means any Write-down and Conversion Powers as defined in the EU Bail-in Legislation Schedule, in relation to the relevant Bail-in Legislation.
“BRRD” means Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms or such other directive as may amend or come into effect in place thereof, as amended or replaced from time to time and including any other relevant implementing regulatory provisions.
“BRRD Liability” means a liability in respect of which the relevant Write-down and Conversion Powers in the applicable Bail-in Legislation may be exercised.
“EU Bail-in Legislation Schedule” means the document described as such, then in effect, and published by the Loan Market Association (or any successor person) from time to time at http://www.lma.eu.com/pages.aspx?p=499.
24
“Relevant Resolution Authority” means the resolution authority with the ability to exercise any Bail-in Powers in relation to the Senior Preferred Debt Securities Registrar.
25
IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed as of the date first written above.
| BANCO SANTANDER, S.A., as Issuer | ||
| By: | /s/ Juan Urigoen Irusta | |
| Name:Juan Urigoen Irusta | ||
| Title: Authorized Signatory | ||
[Signature Page to Third Supplemental Indenture]
| THE BANK OF NEW YORK MELLON, London Branch, as Trustee, Calculation Agent and Principal Paying Agent | ||
| By: | /s/ Michael Lee | |
| Name:Michael Lee | ||
| Title: Authorized Signatory | ||
[Signature Page to Third Supplemental Indenture]
| THE BANK OF NEW YORK MELLON SA/NV, Luxembourg Branch, as Registrar | ||
| By: | /s/ Michael Lee | |
| Name:Michael Lee | ||
| Title: Authorized Signatory | ||
[Signature Page to Third Supplemental Indenture]
EXHIBIT A
FORM OF GLOBAL NOTE
THIS NOTE IS A GLOBAL SECURITY AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY AS THE DEPOSITARY (AS DEFINED IN THE SENIOR PREFERRED DEBT SECURITIES INDENTURE GOVERNING THIS NOTE), OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO THE BASE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.05 OF THE BASE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.09 OF THE BASE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR FIXED RATE NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE RANKING OF THIS NOTE IS SET FORTH IN SECTION 2.02 OF THE SENIOR PREFERRED DEBT SECURITIES INDENTURE, AND SECTION 2.01(r) OF THE THIRD SUPPLEMENTAL INDENTURE, AND THIS NOTE IS ISSUED SUBJECT TO THE PROVISIONS OF SUCH SECTIONS 2.02 AND 2.01(r), RESPECTIVELY, AND THE HOLDER OF THIS NOTE, BY ACCEPTING THE SAME, AGREES TO AND SHALL BE BOUND BY SUCH PROVISIONS. THE PROVISIONS OF SECTION 2.02 OF THE SENIOR PREFERRED DEBT SECURITIES INDENTURE, SECTION 2.01(r) OF THE THIRD SUPPLEMENTAL INDENTURE AND THE TERMS OF THIS PARAGRAPH ARE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE KINGDOM OF SPAIN.
CUSIP No. 05971K AM1
ISIN No. US05971KAM18
SERIES 153 3.892% SENIOR PREFERRED FIXED RATE NOTES DUE 2024 (THE “FIXED RATE NOTES”)
Issued by
BANCO SANTANDER, S.A.
| No. | $ |
BANCO SANTANDER, S.A., a sociedad anónima, incorporated under the laws of the Kingdom of Spain (herein called the “Company”, which term includes any successor person under the Senior Preferred Debt Securities Indenture (as defined on the reverse hereof)), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $ ( dollars) on May 24, 2024 (the “Maturity Date”) or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest thereon semi-annually in arrears on May 24 and November 24 of each year, commencing on November 24, 2022, and ending on May 24, 2024 (each, an “Interest Payment Date”). Interest so payable on any Interest Payment Date shall be paid to the Holder in whose name this Note is registered on the 15th calendar day immediately preceding the relevant Interest Payment Date, whether or not such day is a Business Day, as defined in the Senior Preferred Debt Securities Indenture (each a “Regular Record Date”).
From (and including) the date of issuance to (and excluding) the Maturity Date, interest on this Note will be payable at a fixed rate of 3.892% per annum.
Payments of interest on this Note shall be computed on the basis of a 360-day year divided into twelve months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed in such month.
Payment of the principal amount of and any interest on, this Note will be made by wire transfer of immediately available funds in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Such payment shall be made to the Holder including through a paying agent of the Company for collection by the Holder. If the date for payment of the principal amount hereof or interest thereon is not a Business Day, then (subject as provided in the Senior Preferred Debt Securities Indenture) such payment shall be made on the next succeeding Business Day with the same force and effect as if made on such date for payment, provided that no interest shall accrue on such payment for the period from and after such payment date.
The Fixed Rate Notes are issuable in minimum denominations of $200,000 and integral multiples of $200,000 in excess thereof.
A-2
For information purposes only, without any substantive effect whatsoever and solely in order to comply with Article 413(d) of the Spanish Companies Law (Ley de Sociedades de Capital), approved by Royal Decree 1/2010, of July 2, to the extent applicable, it is hereby noted that the initial aggregate principal amount of the Fixed Rate Notes, i.e., US$1,500,000,000 was equivalent to approximately €1,437,600,000, at the Bloomberg reference exchange rate as of May 16, 2022 of US$1.00 per €0.95840. Amounts due on the Notes shall not under any circumstances whatsoever be payable in any currency other than U.S. Dollars.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner of such Note for the purpose of receiving payment of principal and interest, if any, on and any Additional Amounts with respect to such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee referred to on the reverse hereof by manual, PDF or other electronically imaged signature (including, without limitation, DocuSign and AdobeSign), this Note shall not be entitled to any benefit under the Senior Preferred Debt Securities Indenture or be valid or obligatory for any purpose.
Notwithstanding any other term of this Note or any other agreements, arrangements, or understandings between the Company and any Holder of the Fixed Rate Notes, by its acquisition of this Note, each Holder (which includes each holder of a beneficial interest in this Note) acknowledges, accepts, consents to and agrees: (i) to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority, which may include and result in any of the following, or some combination thereof: the reduction of all, or a portion, of the Amounts Due on a permanent basis; the conversion of all, or a portion, of the Amounts Due into Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person (and the issue to the Holder of such Common Equity Tier 1 instruments, securities or obligations), including by means of an amendment, modification or variation of the terms of the Fixed Rate Notes, in which case the Holder agrees to accept in lieu of its rights under this Note, any such Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person; the cancellation of this Note or Amounts Due; the amendment or alteration of the maturity of this Note or amendment of the interest payable on this Note, or the date on which the interest becomes payable, including by suspending payment for a temporary period; and (ii) that the terms of this Note are subject to, and may be varied, if necessary, to give effect to, the exercise of the Bail-in Power by the Relevant Resolution Authority:
“Amounts Due” means the principal amount of, premium, if any, together with any accrued but unpaid interest, and Additional Amounts, if any, due on the Fixed Rate Notes. References to such amounts will include amounts that have become due and payable, but which have not been paid, prior to the exercise of the Bail-in Power by the Relevant Resolution Authority.
A-3
“Bail-in Power” means any power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the Kingdom of Spain, relating to (i) the transposition of the BRRD, and in particular its article 59 (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), (ii) the SRM Regulation and (iii) the instruments, rules or standards created thereunder, pursuant to which any obligation of a Regulated Entity (or an affiliate of such Regulated Entity) can be reduced, cancelled, suspended, modified, or converted into shares, other securities, or other obligations of such Regulated Entity (or affiliate of such Regulated Entity).
“Business Day” means any day, other than Saturday or Sunday, that is not a legal holiday nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in the City of New York or London nor a day when the Trans-European Automated Real-time Gross Settlement Express Transfer system (the “TARGET2 System”), or any successor thereto, is closed for business.
“BRRD” means Directive 2014/59/EU of 15 May establishing the framework for the recovery and resolution of credit institutions and investment firms or such other directive as may amend or come into effect in place thereof, as implemented into law by Law 11/2015 and RD 1012/2015, as amended or replaced from time to time and including any other relevant implementing regulatory provisions.
“Law 11/2015” means Law 11/2015 of 18 June, on recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de entidades de crédito y empresas de servicios de inversión) as amended or replaced from time to time.
“RD 1012/2015” means Royal Decree 1012/2015, of 6 November developing Law 11/2015, as amended or superseded from time to time.
“Regulated Entity” means any entity to which BRRD, as implemented in the Kingdom of Spain (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), or any other Spanish law relating to the Bail-in Power, applies, which includes, certain credit institutions, investment firms, and certain of their parent or holding companies.
“Relevant Resolution Authority” means the Spanish Fund for the Orderly Restructuring of Banks, the Bank of Spain, the European Single Resolution Board, as the case may be, according to Law 11/2015, and any other entity with the authority to exercise the Bail-in Power or any other resolution power from time to time.
“SRM Regulation” means Regulation (EU) No. 806/2014 of the European Parliament and of the Council of 15 July 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of the Single Resolution Mechanism and the Single Resolution Fund and amending Regulation (EU) No. 1093/2010, as amended or replaced from time to time.
The public deed of issuance (escritura de emisión) related to the Fixed Rate Notes represented hereby was executed on May 19, 2022 before Mr. Miguel Ruiz-Gallardón García de la Rasilla with the number 3,513 of his records.
A-4
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
Dated:
| BANCO SANTANDER, S.A., as Issuer | ||
| By: |
| |
| Name: | ||
| Title: | ||
[Global Note Signature Page]
A-5
CERTIFICATE OF AUTHENTICATION
This is one of the Senior Preferred Debt Securities of the series designated herein referred to in the within-mentioned Senior Preferred Debt Securities Indenture.
Dated:
| THE BANK OF NEW YORK MELLON, London Branch, as Trustee | ||
| By: |
| |
| Name: | ||
| Title: | ||
[Global Note Signature Page]
A-6
[REVERSE OF SECURITY]
This Note is one of a duly authorized issue of securities of the Company of the series designated Series 153 3.892% Senior Preferred Fixed Rate Notes due 2024 (herein called the “Fixed Rate Notes”) issued and to be issued in one or more series under a Senior Preferred Debt Securities Indenture, dated as of June 30, 2021, as heretofore supplemented and amended (herein called the “Base Indenture”), between the Company, as issuer, and The Bank of New York Mellon, London Branch, as trustee (herein called the “Trustee”, which term includes any successor trustee under the Base Indenture), as amended and supplemented by the Third Supplemental Indenture, dated as of May 24, 2022, among the Company, The Bank of New York Mellon, London Branch, as Trustee, Calculation Agent and Principal Paying Agent, and The Bank of New York Mellon, Luxembourg Branch, as Senior Preferred Debt Securities Registrar (the “Third Supplemental Indenture”, and, the Base Indenture, as amended and supplemented by the Third Supplemental Indenture, the “Senior Preferred Debt Securities Indenture”) to which Senior Preferred Debt Securities Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company and the Trustee and the Holders of the Fixed Rate Notes and of the terms upon which the Fixed Rate Notes are, and are to be, authenticated and delivered. Capitalized terms used herein are used as defined in the Senior Preferred Debt Securities Indenture unless otherwise indicated. The terms of the Fixed Rate Notes include those stated in the Senior Preferred Debt Securities Indenture. The Fixed Rate Notes are subject to all such terms, and Holders are referred to the Senior Preferred Debt Securities Indenture for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Senior Preferred Debt Securities Indenture, the terms of the Senior Preferred Debt Securities Indenture will control.
This Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $1,500,000,000; provided, that the Company may, from time to time, without the consent of the Holders of the Fixed Rate Notes, issue additional Senior Preferred Debt Securities under the Senior Preferred Debt Securities Indenture, having the same ranking and same interest rate, maturity, redemption terms and other terms, except for the price to the public, original interest accrual date, issue date and first interest payment date, as the Fixed Rate Notes; provided, however, that such additional Fixed Rate Notes will not have the same CUSIP, ISIN or other identifying number as the outstanding Fixed Rate Notes unless the additional Fixed Rate Notes are fungible with the Fixed Rate Notes for U.S. federal income tax purposes. Any such additional Fixed Rate Notes, together with the Fixed Rate Notes, will constitute a single series of Fixed Rate Notes under the Senior Preferred Debt Securities Indenture and shall be included in the definition of “Senior Preferred Debt Securities” in the Base Indenture where the context requires.
The payment obligations of the Company under the Fixed Rate Notes on account of principal constitute direct, unconditional, unsubordinated and unsecured obligations (créditos ordinarios) of the Company and, upon the insolvency of Banco Santander (but subject to any other ranking that may apply as a result of any mandatory provision of law (or otherwise)), such payment obligations in respect of principal rank (i) pari passu among themselves and with any Senior Higher Priority Liabilities (as defined below) and (ii) senior to (x) any Senior Non Preferred Liabilities (as defined below) and (y) any present and future subordinated obligations (créditos subordinados) of the Company in accordance with Article 281 of the Spanish Insolvency Law (as defined below).
A-7
Claims of Holders of Fixed Rate Notes in respect of interest accrued but unpaid as of the commencement of any insolvency procedure in respect of the Company shall constitute subordinated claims (créditos subordinados) against the Company ranking in accordance with the provisions of Article 281.1.3º of the Spanish Insolvency Law and no further interest shall accrue from the date of the declaration of insolvency of the Company.
The obligations of the Company under the Fixed Rate Notes are subject to the Bail-in Power.
“Law 11/2015” means Law 11/2015 of 18 June, on recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de entidades de crédito y empresas de servicios de inversión) as amended or replaced from time to time.
“Senior Higher Priority Liabilities” means the unsubordinated and unsecured obligations (créditos ordinarios) of the Company (including the Fixed Rate Notes), other than the Senior Non Preferred Liabilities.
“Senior Non Preferred Liabilities” means any unsubordinated and unsecured senior non preferred obligations (créditos ordinarios no preferentes) of the Company under Additional Provision 14.2 of Law 11/2015 (including any senior non preferred notes) and any other obligations which, by law and/or by their terms, and to the extent permitted by Spanish law, rank pari passu with the Senior Non Preferred Liabilities.
“Spanish Insolvency Law” means the restated text of the Spanish Insolvency Law (Ley Concursal) approved by the Royal Decree-Legislative 1/2020, of 5 May, as amended from time to time.
The provisions of Section 2.02 of the Senior Preferred Debt Securities Indenture, and Section 2.01(r) of the Third Supplemental Indenture shall apply only to rights or claims payable with respect to the Fixed Rate Notes and nothing herein shall affect or prejudice the payment of the costs, charges, expenses, liabilities, indemnity or remuneration of the Trustee, the first lien rights of the Trustee under Section 6.08 of the Base Indenture, or the rights and remedies of the Trustee in respect thereof.
The Company agrees with respect to the Fixed Rate Notes and each Holder of the Fixed Rate Notes, by his or her acquisition of the Fixed Rate Notes will be deemed to have agreed to the ranking as described herein. Each such Holder will be deemed to have irrevocably waived his or her rights of priority which would otherwise be accorded to him or her under the laws of Spain, to the extent necessary to effectuate the ranking provisions of the Fixed Rate Notes. In addition, each Holder of the Fixed Rate Notes by his or her acquisition of such Fixed Rate Notes authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the ranking of such Fixed Rate Notes as provided in the Senior Preferred Debt Securities Indenture, and as summarized herein and appoints the Trustee as his or her attorney-in-fact for any and all such purposes.
A-8
Notwithstanding any other term of this Note or any other agreements, arrangements, or understandings between the Company and any Holder of the Fixed Rate Notes, by its acquisition of this Note, each Holder (which includes each holder of a beneficial interest in this Note) acknowledges, accepts, consents to and agrees: (i) to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority, which may include and result in any of the following, or some combination thereof: the reduction of all, or a portion, of the Amounts Due on a permanent basis; the conversion of all, or a portion, of the Amounts Due into Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person (and the issue to the Holder of such Common Equity Tier 1 instruments, securities or obligations), including by means of an amendment, modification or variation of the terms of the Fixed Rate Notes, in which case the Holder agrees to accept in lieu of its rights under this Note, any such Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person; the cancellation of this Note or Amounts Due; the amendment or alteration of the maturity of this Note or amendment of the interest payable on this Note, or the date on which the interest becomes payable, including by suspending payment for a temporary period; and (ii) that the terms of this Note are subject to, and may be varied, if necessary, to give effect to, the exercise of the Bail-in Power by the Relevant Resolution Authority.
“Amounts Due” means the principal amount of, premium, if any, together with any accrued but unpaid interest, and Additional Amounts, if any, due on the Fixed Rate Notes. References to such amounts will include amounts that have become due and payable, but which have not been paid, prior to the exercise of the Bail-in Power by the Relevant Resolution Authority.
“Bail-in Power” means any power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the Kingdom of Spain, relating to (i) the transposition of the BRRD, and in particular its article 59 (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), (ii) the SRM Regulation and (iii) the instruments, rules or standards created thereunder, pursuant to which any obligation of a Regulated Entity (or an affiliate of such Regulated Entity) can be reduced, cancelled, suspended, modified, or converted into shares, other securities, or other obligations of such Regulated Entity (or affiliate of such Regulated Entity).
“BRRD” means Directive 2014/59/EU of 15 May establishing the framework for the recovery and resolution of credit institutions and investment firms or such other directive as may amend or come into effect in place thereof, as implemented into law by Law 11/2015 and RD 1012/2015, as amended or replaced from time to time and including any other relevant implementing regulatory provisions.
“RD 1012/2015” means Royal Decree 1012/2015, of 6 November developing Law 11/2015, as amended or superseded from time to time.
“Regulated Entity” means any entity to which BRRD, as implemented in the Kingdom of Spain (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), or any other Spanish law relating to the Bail-in Power, applies, which includes, certain credit institutions, investment firms, and certain of their parent or holding companies.
“Relevant Resolution Authority” means the Spanish Fund for the Orderly Restructuring of Banks, the Bank of Spain, the European Single Resolution Board, as the case may be, according to Law 11/2015, and any other entity with the authority to exercise the Bail-in Power or any other resolution power from time to time.
A-9
“SRM Regulation” means Regulation (EU) No. 806/2014 of the European Parliament and of the Council of 15 July 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of the Single Resolution Mechanism and the Single Resolution Fund and amending Regulation (EU) No. 1093/2010, as amended or replaced from time to time.
The exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Fixed Rate Notes shall not constitute an event of default and the terms and conditions of the Fixed Rate Notes shall continue to apply in relation to the residual principal amount of, or outstanding amount payable with respect to, the Fixed Rate Notes subject to any modification of the amount of distributions payable to reflect the reduction of the principal amount, and any further modification of the terms that the Relevant Resolution Authority may decide in accordance with applicable laws and regulations relating to the resolution of credit institutions, investment firms and/or Company entities incorporated in the relevant member state.
No repayment or payment of Amounts Due, if any, on the Fixed Rate Notes, will become due and payable or be paid after the exercise of any Bail-in Power by the Relevant Resolution Authority if and to the extent such amounts have been reduced, converted, cancelled, amended or altered as a result of such exercise.
By its acquisition of this Note, each Holder of this Note, (which, for the purposes of this clause, includes each Holder of a beneficial interest in this Note), to the extent permitted by the Trust Indenture Act, will waive any and all claims, in law and/or in equity, against the Trustee for, agree not to initiate a suit against the Trustee in respect of, and agree that the Trustee will not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to this Note.
Additionally, by its acquisition of this Note, each Holder of this Note acknowledges and agrees that, upon the exercise of the Bail-in Power by the Relevant Resolution Authority:
(i) the Trustee will not be required to take any further directions from the Holders of the Fixed Rate Notes with respect to any portion of the Fixed Rate Notes that are written-down, converted to equity and/or cancelled under the Fixed Rate Debt Securities Indenture, which authorizes Holders of a majority in aggregate outstanding principal amount of the outstanding Fixed Rate Notes to direct certain actions relating to the Fixed Rate Notes; and
(ii) the Senior Preferred Debt Securities Indenture will not impose any duties upon the Trustee whatsoever with respect to the exercise of the Bail-in Power by the Relevant Resolution Authority;
provided, however, that notwithstanding the exercise of the Bail-in Power by the Relevant Resolution Authority, so long as the Fixed Rate Notes remain outstanding, there will at all times be a Trustee for the Fixed Rate Notes in accordance with the Senior Preferred Debt Securities Indenture, and the resignation and/or removal of the Trustee and the appointment of a successor Trustee will continue to be governed by the Base Indenture, including to the extent no additional supplemental indenture or amendment is agreed upon in the event the Fixed Rate Notes remain outstanding following the completion of the exercise of the Bail-in Power.
A-10
By its acquisition of this Note, each Holder of this Note acknowledges and agrees that neither a cancellation or deemed cancellation of the principal or interest (in each case, in whole or in part), nor the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Fixed Rate Notes will give rise to a default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act.
By purchasing this Note, each Holder (including each beneficial owner) of this Note shall be deemed to have authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds this Note to take any and all necessary action, if required, to implement the exercise of the Bail-in Power with respect to the Fixed Rate Notes as it may be imposed, without any further action or direction on the part of such Holder.
Each Holder of this Note also acknowledges and agrees that the foregoing description of the Bail-in Power and its exercise is exhaustive on the matters described herein to the exclusion of any other agreements, arrangements or understandings relating to the application of any Bail-in Power to the Fixed Rate Notes.
Each Holder of this Note that acquires such Fixed Rate Notes in the secondary market (including each beneficial owner) shall be deemed to acknowledge, agree to be bound by and consent to the same provisions specified herein to the same extent as the Holders of the Fixed Rate Notes that acquire the Fixed Rate Notes upon their initial issuance, including, without limitation, with respect to the acknowledgment and agreement to be bound by and consent to the terms of the Fixed Rate Notes, including in relation to the Bail-in-Power.
Additional terms of the Fixed Rate Notes, including but not limited to events of default, remedies, payment of additional amounts in respect of withholding tax, substitution and variation of the Fixed Rate Notes upon certain regulatory events, and amendment are set forth in the Senior Preferred Debt Securities Indenture.
The Senior Preferred Debt Securities Indenture and the Fixed Rate Notes shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the choice of law provisions), except for Section 2.02 of the Senior Preferred Debt Securities Indenture, Section 2.01(r) of the Third Supplemental Indenture and the status of the Fixed Rate Notes, which shall be governed by and construed in accordance with the laws of The Kingdom of Spain, and except that the authorization and execution by the Company of the Senior Preferred Debt Securities Indenture and the Fixed Rate Notes shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of organization of the Company and the Trustee, as the case may be.
The Fixed Rate Notes and this Note have been issued in the State of New York.
A-11
EXHIBIT B
FORM OF GLOBAL NOTE
THIS NOTE IS A GLOBAL SECURITY AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY AS THE DEPOSITARY (AS DEFINED IN THE SENIOR PREFERRED DEBT SECURITIES INDENTURE GOVERNING THIS NOTE), OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO THE BASE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.05 OF THE BASE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.09 OF THE BASE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR FLOATING RATE NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE RANKING OF THIS NOTE IS SET FORTH IN SECTION 2.02 OF THE SENIOR PREFERRED DEBT SECURITIES INDENTURE, AND SECTION 2.02(t) OF THE THIRD SUPPLEMENTAL INDENTURE, AND THIS NOTE IS ISSUED SUBJECT TO THE PROVISIONS OF SUCH SECTIONS 2.02 AND 2.02(t), RESPECTIVELY, AND THE HOLDER OF THIS NOTE, BY ACCEPTING THE SAME, AGREES TO AND SHALL BE BOUND BY SUCH PROVISIONS. THE PROVISIONS OF SECTION 2.02 OF THE SENIOR PREFERRED DEBT SECURITIES INDENTURE, SECTION 2.02(t) OF THE THIRD SUPPLEMENTAL INDENTURE AND THE TERMS OF THIS PARAGRAPH ARE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE KINGDOM OF SPAIN.
CUSIP No. 05971K AN9
ISIN No. US05971KAN90
SERIES 156 FLOATING RATE SENIOR NOTES DUE 2024 (THE “FLOATING RATE NOTES”)
Issued by
BANCO SANTANDER, S.A.
| No. | $ |
BANCO SANTANDER, S.A., a sociedad anónima, incorporated under the laws of the Kingdom of Spain (herein called the “Company”, which term includes any successor person under the Senior Preferred Debt Securities Indenture (as defined on the reverse hereof)), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $ ( dollars) on May 24, 2024 (the “Maturity Date”) or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest thereon quarterly in arrears on February 24, May 24, August 24, and November 24 of each year, commencing on August 24, 2022 up to and including the Maturity Date or any date of earlier redemption (each a “Floating Interest Payment Date”). Interest so payable on any Floating Interest Payment Date shall be paid to the Holder in whose name this Note is registered on the 15th calendar day immediately preceding the relevant Floating Interest Payment Date, whether or not such day is a Business Day, as defined in the Senior Preferred Debt Securities Indenture (each a “Regular Record Date”).
From (and including) the date of issuance to (and excluding) the Maturity Date, the Floating Rate Notes will bear interest at the Floating Rate Interest Rate.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Payment of the principal amount of and any interest on, this Note will be made by wire transfer of immediately available funds in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Such payment shall be made to the Holder including through a paying agent of the Company for collection by the Holder. If the date for payment of the principal amount hereof or interest thereon is not a Business Day, then (subject as provided in the Senior Preferred Debt Securities Indenture) such payment shall be made on the next succeeding Business Day with the same force and effect as if made on such date for payment, provided that no interest shall accrue on such payment for the period from and after such payment date.
B-2
The Floating Rate Notes are issuable in minimum denominations of $200,000 and integral multiples of $200,000 in excess thereof.
For information purposes only, without any substantive effect whatsoever and solely in order to comply with Article 413(d) of the Spanish Companies Law (Ley de Sociedades de Capital), approved by Royal Decree 1/2010, of July 2, to the extent applicable, it is hereby noted that the initial aggregate principal amount of the Floating Rate Notes, i.e., US$650,000,000 was equivalent to approximately €622,960,000, at the Bloomberg reference exchange rate as of May 16, 2022 of US$1.00 per €0.95840. Amounts due on the Notes shall not under any circumstances whatsoever be payable in any currency other than U.S. Dollars.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner of such Note for the purpose of receiving payment of principal and interest, if any, on and any Additional Amounts with respect to such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee referred to on the reverse hereof by manual, PDF or other electronically imaged signature (including, without limitation, DocuSign and AdobeSign), this Note shall not be entitled to any benefit under the Senior Preferred Debt Securities Indenture or be valid or obligatory for any purpose.
Notwithstanding any other term of this Note or any other agreements, arrangements, or understandings between the Company and any Holder of the Floating Rate Notes, by its acquisition of this Note, each Holder (which includes each holder of a beneficial interest in this Note) acknowledges, accepts, consents to and agrees: (i) to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority, which may include and result in any of the following, or some combination thereof: the reduction of all, or a portion, of the Amounts Due on a permanent basis; the conversion of all, or a portion, of the Amounts Due into Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person (and the issue to the Holder of such Common Equity Tier 1 instruments, securities or obligations), including by means of an amendment, modification or variation of the terms of the Floating Rate Notes, in which case the Holder agrees to accept in lieu of its rights under this Note, any such Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person; the cancellation of this Note or Amounts Due; the amendment or alteration of the maturity of this Note or amendment of the interest payable on this Note, or the date on which the interest becomes payable, including by suspending payment for a temporary period; and (ii) that the terms of this Note are subject to, and may be varied, if necessary, to give effect to, the exercise of the Bail-in Power by the Relevant Resolution Authority:
“Amounts Due” means the principal amount of, premium, if any, together with any accrued but unpaid interest, and Additional Amounts, if any, due on the Floating Rate Notes. References to such amounts will include amounts that have become due and payable, but which have not been paid, prior to the exercise of the Bail-in Power by the Relevant Resolution Authority.
B-3
“Bail-in Power” means any power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the Kingdom of Spain, relating to (i) the transposition of the BRRD, and in particular its article 59 (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), (ii) the SRM Regulation and (iii) the instruments, rules or standards created thereunder, pursuant to which any obligation of a Regulated Entity (or an affiliate of such Regulated Entity) can be reduced, cancelled, suspended, modified, or converted into shares, other securities, or other obligations of such Regulated Entity (or affiliate of such Regulated Entity).
“Business Day” means any day, other than Saturday or Sunday, that is not a legal holiday nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in the City of New York or London nor a day when the Trans-European Automated Real-time Gross Settlement Express Transfer system (the “TARGET2 System”), or any successor thereto, is closed for business.
“BRRD” means Directive 2014/59/EU of 15 May establishing the framework for the recovery and resolution of credit institutions and investment firms or such other directive as may amend or come into effect in place thereof, as implemented into law by Law 11/2015 and RD 1012/2015, as amended or replaced from time to time and including any other relevant implementing regulatory provisions.
“Law 11/2015” means Law 11/2015 of 18 June, on recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de entidades de crédito y empresas de servicios de inversión) as amended or replaced from time to time.
“RD 1012/2015” means Royal Decree 1012/2015, of 6 November developing Law 11/2015, as amended or superseded from time to time.
“Regulated Entity” means any entity to which BRRD, as implemented in the Kingdom of Spain (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), or any other Spanish law relating to the Bail-in Power, applies, which includes, certain credit institutions, investment firms, and certain of their parent or holding companies.
“Relevant Resolution Authority” means the Spanish Fund for the Orderly Restructuring of Banks, the Bank of Spain, the European Single Resolution Board, as the case may be, according to Law 11/2015, and any other entity with the authority to exercise the Bail-in Power or any other resolution power from time to time.
“SRM Regulation” means Regulation (EU) No. 806/2014 of the European Parliament and of the Council of 15 July 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of the Single Resolution Mechanism and the Single Resolution Fund and amending Regulation (EU) No. 1093/2010, as amended or replaced from time to time.
The public deed of issuance (escritura de emisión) related to the Floating Rate Notes represented hereby was executed on May 19, 2022 before Mr. Miguel Ruiz-Gallardón García de la Rasilla with the number 3,513 of his records.
B-4
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
Dated:
| BANCO SANTANDER, S.A., as Issuer | ||
| By: |
| |
| Name: | ||
| Title: | ||
[Global Note Signature Page]
B-5
CERTIFICATE OF AUTHENTICATION
This is one of the Senior Preferred Debt Securities of the series designated herein referred to in the within-mentioned Senior Preferred Debt Securities Indenture.
Dated:
| THE BANK OF NEW YORK MELLON, London Branch, as Trustee | ||
| By: |
| |
| Name: | ||
| Title: | ||
[Global Note Signature Page]
B-6
[REVERSE OF SECURITY]
This Note is one of a duly authorized issue of securities of the Company of the series designated Series 156 Senior Preferred Floating Rate Notes due 2024 (herein called the “Floating Rate Notes”) issued and to be issued in one or more series under a Senior Preferred Debt Securities Indenture, dated as of June 30, 2021, as heretofore supplemented and amended (herein called the “Base Indenture”), between the Company, as issuer, and The Bank of New York Mellon, London Branch, as trustee (herein called the “Trustee”, which term includes any successor trustee under the Base Indenture), as amended and supplemented by the Third Supplemental Indenture, dated as of May 24, 2022, among the Company, The Bank of New York Mellon, London Branch, as Trustee, Calculation Agent and Principal Paying Agent, and The Bank of New York Mellon, Luxembourg Branch, as Senior Preferred Debt Securities Registrar (the “Third Supplemental Indenture”, and, the Base Indenture, as amended and supplemented by the Third Supplemental Indenture, the “Senior Preferred Debt Securities Indenture”) to which Senior Preferred Debt Securities Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company and the Trustee and the Holders of the Floating Rate Notes and of the terms upon which the Floating Rate Notes are, and are to be, authenticated and delivered. Capitalized terms used herein are used as defined in the Senior Preferred Debt Securities Indenture unless otherwise indicated. The terms of the Floating Rate Notes include those stated in the Senior Preferred Debt Securities Indenture. The Floating Rate Notes are subject to all such terms, and Holders are referred to the Senior Preferred Debt Securities Indenture for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Senior Preferred Debt Securities Indenture, the terms of the Senior Preferred Debt Securities Indenture will control.
The Company promises to pay interest on the principal amount of the Floating Rate Notes at a rate per annum equal to the Compounded SOFR plus 124 basis points, subject to a minimum interest rate of 0% (the “Floating Rate Interest Rate”), as further described below.
Interest will be paid quarterly on the Floating Interest Payment Date. If any scheduled Floating Interest Payment Date, other than the scheduled Maturity Date or date of redemption or repayment, would fall on a day that is not a Business Day, that Floating Interest Payment Date will be postponed to the next succeeding Business Day, except that if that Business Day falls in the next succeeding calendar month, the Floating Interest Payment Date will be the immediately preceding Business Day. If the scheduled Maturity Date or date of redemption or repayment is not a Business Day, the Company will pay any interest and principal and/or any amount payable upon redemption of the Floating Rate Notes, as applicable, on the next succeeding Business Day, but such final Floating Interest Payment Date will not be postponed and interest on that payment will not accrue from and after the scheduled maturity date or date of redemption or repayment. Interest on the Floating Rate Notes shall be determined five U.S. Government Securities Business Days before each Floating Interest Payment Date.
Each interest period on the Floating Rate Notes will begin on (and include) a Floating Interest Payment Date (or, in the case of the first interest period, May 24, 2022) and end on (but exclude) the following Floating Interest Payment Date, or, in the case of the final interest period, the Maturity Date (each an “Interest Period”).
B-7
The amount of interest accrued and payable on the Floating Rate Notes for each Interest Period will be equal to the product of (i) the outstanding principal amount of the Floating Rate Notes multiplied by (ii) the product of (a) the interest rate for the relevant Interest Period multiplied by (b) the quotient of the actual number of calendar days in such Interest Period divided by 360.
With respect to any Interest Period, “Compounded SOFR” means a compounded average of daily SOFR, that will be determined by the Calculation Agent in respect of any Interest Period in accordance with the following formula, with the resulting percentage being rounded, if necessary, to the fifth decimal place, with 0.000005 being rounded upwards:
Where:
“d” means, in respect of the relevant Observation Period, the number of calendar days in such Observation Period;
“d0” means, in respect of any Observation Period, the number of U.S. Government Securities Business Days in the relevant Observation Period;
“i” means a series of whole numbers from one to d0, each representing the relevant U.S. Government Securities Business Days in chronological order from, and including, the first U.S. Government Securities Business Day in the relevant Observation Period;
“ni” means, in respect of any U.S. Government Securities Business Dayi, in the relevant Observation Period the number of calendar days from, and including, such U.S. Government Securities Business Dayi up to, but excluding, the following U.S. Government Securities Business Day;
“Observation Period” means, in respect of an Interest Period, the period from, and including, the date falling the number of Observation Shift Days prior to the first day of such Interest Period and ending on, but excluding, the date that is the number of Observation Shift Days prior to the Floating Interest Payment Date for such Interest Period;
“Observation Shift Days” means five U.S. Government Securities Business Days; and
“SOFRi” means, in respect of any U.S. Government Securities Business Dayi in the relevant Observation Period, the SOFR in respect of such U.S. Government Securities Business Day;
“U.S. Government Securities Business Day” means any day except for a Saturday, Sunday or a day on which the Securities Industry and Financial Markets Association (SIFMA) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
B-8
“SOFR” means the rate determined by the Calculation Agent in respect of a U.S. Government Securities Business Day, in accordance with the following provisions:
(i) the Secured Overnight Financing Rate published for such U.S. Government Securities Business Day as such rate appears on the SOFR Administrator’s Website at 3:00 p.m. (New York time) on the immediately following U.S. Government Securities Business Day (the “SOFR Determination Time”);
(ii) if the rate specified in (i) above does not so appear, the Secured Overnight Financing Rate as published in respect of the first preceding U.S. Government Securities Business Day for which the Secured Overnight Financing Rate was published on the SOFR Administrator’s Website;
where:
“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the Secured Overnight Financing Rate); and
“SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, or any successor source.
Notwithstanding anything to the contrary herein, if the Company or its designee determine on or prior to the relevant SOFR Determination Time that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Compounded SOFR, then the provisions set forth below will thereafter apply to all determinations of the rate of interest payable on the Floating Rate Notes.
For the avoidance of doubt, in accordance with the benchmark replacement provisions, after a Benchmark Transition Event and its related Benchmark Replacement Date have occurred, the interest payable for each Interest Period on the Floating Rate Notes will be an annual rate equal to the sum of the Benchmark Replacement and the applicable margin.
If the Company or its designee determines on or prior to the relevant Reference Time that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred in respect of the then-current Benchmark, the Benchmark Replacement will replace the then-current Benchmark for all purposes relating to the Floating Rate Notes in respect of all determinations on such date and all determinations on all subsequent dates.
In connection with the implementation of a Benchmark Replacement, the Company or its designee will have the right to make Benchmark Replacement Conforming Changes from time to time. No such change shall affect the Trustee’s or the Calculation Agent’s own rights, duties or immunities under the Indenture, the Calculation Agency Agreement or otherwise without their consent.
Any determination, decision, election or calculation that may be made by the Company or its designee pursuant to the provisions described in this section, including any determination with respect to a rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error, will be made in the Company or the Calculation Agent’s sole discretion, and, notwithstanding anything to the contrary in the documentation relating to the Floating Rate Notes, shall become effective without consent from the Holders of the Floating Rate Notes or any other party.
B-9
In no event shall the Calculation Agent, the Trustee or any paying agent be responsible for making any such determination, decision, election or calculation; or have any responsibility to determine whether any manifest error has occurred, and, in the absence of notice from us, may conclusively assume that no manifest error exists and shall suffer no liability in in so assuming.
None of the Trustee, the Principal Paying Agent or the Calculation Agent (unless the Company is acting in such capacity) shall be under any obligation to: (i) monitor, determine or verify the unavailability or cessation of Compounded SOFR or SOFR, or whether or when there has occurred, or to give notice to any other transaction party of the occurrence of, any Benchmark Transition Event or related Benchmark Replacement Date, (ii) select, determine or designate any Benchmark Replacement, or other successor or replacement benchmark index, or whether any conditions to the designation of such a rate or index have been satisfied, (iii) select, determine or designate any Benchmark Replacement Adjustment, or other modifier to any replacement or successor index, or (iv) determine whether or what Benchmark Replacement Conforming Changes are necessary or advisable, if any, in connection with any of the foregoing, including, but not limited to, adjustments as to any alternative spread thereon, the business day convention, interest determination dates or any other relevant methodology applicable to such substitute or successor benchmark.
For the avoidance of doubt, in no event shall the Trustee, the Principal Paying Agent or the Calculation Agent be required to act as the Company’s designee for the purposes of determining if any Benchmark Transition Event has occurred, selecting any Benchmark Replacement or determining any Benchmark Replacement Adjustment unless such Trustee, the Principal Paying Agent or Calculation Agent agrees to such appointment in writing.
In connection with the foregoing, each of the Trustee, the Principal Paying Agent and the Calculation Agent shall be entitled to rely conclusively on any determinations made by the Company or its designee without independent investigation, and none will have any liability for actions taken at the Company’s direction in connection therewith.
None of the Trustee, the Principal Paying Agent or the Calculation Agent shall be liable for any inability, failure or delay on its part to perform any of its duties set forth in this Third Supplemental Indenture as a result of the unavailability of SOFR, Compounded SOFR or other applicable Benchmark Replacement, including as a result of any failure, inability, delay, error or inaccuracy on the part of any other transaction party in providing any direction, instruction, notice or information required or contemplated by the terms of the Third Supplemental Indenture and reasonably required for the performance of such duties. None of the Trustee, the Principal Paying Agent or the Calculation Agent shall be responsible or liable for the Company’s actions or omissions or for those of the Company’s designee, or for any failure or delay in the performance by the Company or its designee, nor shall any of the Trustee, the Principal Paying Agent or the Calculation Agent be under any obligation to oversee or monitor the Company’s performance or that of the Company’s designee.
B-10
As used herein, the following definitions apply:
“Benchmark” means, initially, Compounded SOFR, as such term is defined above; provided that if the Company or its designee determine on or prior to the Reference Time that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Compounded SOFR (or the published daily SOFR used in the calculation thereof) or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement.
“Benchmark Replacement” means the first alternative set forth in the order below that can be determined by the Company or its designee as of the Benchmark Replacement Date:
| (1) | the sum of: (a) the alternate rate of interest that has been selected or recommended by the Relevant Governmental Body as the replacement for the then-current Benchmark for the applicable Corresponding Tenor and (b) the Benchmark Replacement Adjustment; |
| (2) | the sum of: (a) the ISDA Fallback Rate and (b) the Benchmark Replacement Adjustment; or |
| (3) | the sum of: (a) the alternate rate of interest that has been selected by the Company or its designee as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to any industry-accepted rate of interest as a replacement for the then-current Benchmark for U.S. dollar denominated floating rate notes at such time and (b) the Benchmark Replacement Adjustment. |
“Benchmark Replacement Adjustment” means the first alternative set forth in the order below that can be determined by the Company or its designee as of the Benchmark Replacement Date:
| (1) | the spread adjustment, or method for calculating or determining such spread adjustment (which may be a positive or negative value or zero) that has been selected or recommended by the Relevant Governmental Body for the applicable Unadjusted Benchmark Replacement; |
| (2) | if the applicable Unadjusted Benchmark Replacement is equivalent to the ISDA Fallback Rate, then the ISDA Fallback Adjustment; or |
| (3) | the spread adjustment (which may be a positive or negative value or zero) that has been selected by the Company or its designee giving due consideration to any industry-accepted spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the then-current Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar denominated floating rate notes at such time. |
For the avoidance of doubt, the Benchmark Replacement Adjustment for the applicable Benchmark Replacement Date may be selected, recommended or determined on a day other than such Benchmark Replacement Date.
B-11
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definitions of “Interest Period” and “Observation Period”, timing and frequency of determining rates and making payments of interest, rounding of amounts or tenors, and other administrative matters) that the Company or its designee decide may be appropriate to reflect the adoption of such Benchmark Replacement in a manner substantially consistent with market practice (or, if the Company or its designee decide that adoption of any portion of such market practice is not administratively feasible or if the Company or its designee determine that no market practice for use of the Benchmark Replacement exists, in such other manner as the Company or its designee determine is reasonably necessary).
“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark (including the daily published component used in the calculation thereof):
| (1) | in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of the Benchmark permanently or indefinitely ceases to provide the Benchmark (or such component); or |
| (2) | in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein. |
For the avoidance of doubt, if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination.
“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark (including the daily published component used in the calculation thereof):
| (1) | a public statement or publication of information by or on behalf of the administrator of the Benchmark (or such component) announcing that such administrator has ceased or will cease to provide the Benchmark (or such component), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark (or such component); |
| (2) | a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark (or such component), the central bank for the currency of the Benchmark (or such component), an insolvency official with jurisdiction over the administrator for the Benchmark (or such component), a resolution authority with jurisdiction over the administrator for the Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for the Benchmark (or such component), which states that the administrator of the Benchmark (or such component) has ceased or will cease to provide the Benchmark (or such component) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark (or such component); or |
B-12
| (3) | a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark announcing that the Benchmark is no longer representative. |
“Corresponding Tenor” with respect to a Benchmark Replacement means a tenor (including overnight) having approximately the same length (disregarding business day adjustment) as the applicable tenor for the then-current Benchmark.
“ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time.
“ISDA Fallback Adjustment” means the spread adjustment, which may be a positive or negative value or zero, that would apply for derivatives transactions referencing the ISDA Definitions to be determined upon the occurrence of an index cessation event with respect to the Benchmark for the applicable tenor.
“ISDA Fallback Rate” means the rate that would apply for derivatives transactions referencing the ISDA Definitions to be effective upon the occurrence of an index cessation date with respect to the Benchmark for the applicable tenor excluding the applicable ISDA Fallback Adjustment.
“Reference Time” with respect to any determination of the Benchmark means (1) if the Benchmark is Compounded SOFR, the SOFR Determination Time, and (2) if the Benchmark is not Compounded SOFR, the time determined by the Company or its designee in accordance with the Benchmark Replacement Conforming Changes.
“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
This Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $650,000,000; provided, that the Company may, from time to time, without the consent of the Holders of the Floating Rate Notes, issue additional Senior Preferred Debt Securities under the Senior Preferred Debt Securities Indenture, having the same ranking and same interest rate, maturity, redemption terms and other terms, except for the price to the public, original interest accrual date, issue date and first interest payment date, as the Floating Rate Notes; provided, however, that such additional Floating Rate Notes will not have the same CUSIP, ISIN or other identifying number as the outstanding Floating Rate Notes unless the additional Floating Rate Notes are fungible with the Floating Rate Notes for U.S. federal income tax purposes. Any such additional Floating Rate Notes, together with the Floating Rate Notes, will constitute a single series of Floating Rate Notes under the Senior Preferred Debt Securities Indenture and shall be included in the definition of “Senior Preferred Debt Securities” in the Base Indenture where the context requires.
B-13
The payment obligations of the Company under the Floating Rate Notes on account of principal constitute direct, unconditional, unsubordinated and unsecured obligations (créditos ordinarios) of the Company and, upon the insolvency of Banco Santander (but subject to any other ranking that may apply as a result of any mandatory provision of law (or otherwise)), such payment obligations in respect of principal rank (i) pari passu among themselves and with any Senior Higher Priority Liabilities (as defined below) and (ii) senior to (x) any Senior Non Preferred Liabilities (as defined below) and (y) any present and future subordinated obligations (créditos subordinados) of the Company in accordance with Article 281 of the Spanish Insolvency Law (as defined below).
Claims of Holders of Floating Rate Notes in respect of interest accrued but unpaid as of the commencement of any insolvency procedure in respect of the Company shall constitute subordinated claims (créditos subordinados) against the Company ranking in accordance with the provisions of Article 281.1.3º of the Spanish Insolvency Law and no further interest shall accrue from the date of the declaration of insolvency of the Company.
The obligations of the Company under the Floating Rate Notes are subject to the Bail-in Power.
“Law 11/2015” means Law 11/2015 of 18 June, on recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de entidades de crédito y empresas de servicios de inversión) as amended or replaced from time to time.
“Senior Higher Priority Liabilities” means the unsubordinated and unsecured obligations (créditos ordinarios) of the Company (including the Floating Rate Notes), other than the Senior Non Preferred Liabilities.
“Senior Non Preferred Liabilities” means any unsubordinated and unsecured senior non preferred obligations (créditos ordinarios no preferentes) of the Company under Additional Provision 14.2 of Law 11/2015 (including any senior non preferred notes) and any other obligations which, by law and/or by their terms, and to the extent permitted by Spanish law, rank pari passu with the Senior Non Preferred Liabilities.
“Spanish Insolvency Law” means the restated text of the Spanish Insolvency Law (Ley Concursal) approved by the Royal Decree-Legislative 1/2020, of 5 May, as amended from time to time.
The provisions of Section 2.02 of the Senior Preferred Debt Securities Indenture, and Section 2.02(t) of the Third Supplemental Indenture shall apply only to rights or claims payable with respect to the Floating Rate Notes and nothing herein shall affect or prejudice the payment of the costs, charges, expenses, liabilities, indemnity or remuneration of the Trustee, the first lien rights of the Trustee under Section 6.08 of the Base Indenture, or the rights and remedies of the Trustee in respect thereof.
B-14
The Company agrees with respect to the Floating Rate Notes and each Holder of the Floating Rate Notes, by his or her acquisition of the Floating Rate Notes will be deemed to have agreed to the ranking as described herein. Each such Holder will be deemed to have irrevocably waived his or her rights of priority which would otherwise be accorded to him or her under the laws of Spain, to the extent necessary to effectuate the ranking provisions of the Floating Rate Notes. In addition, each Holder of the Floating Rate Notes by his or her acquisition of such Floating Rate Notes authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the ranking of such Floating Rate Notes as provided in the Senior Preferred Debt Securities Indenture, and as summarized herein and appoints the Trustee as his or her attorney-in-fact for any and all such purposes.
Notwithstanding any other term of this Note or any other agreements, arrangements, or understandings between the Company and any Holder of the Floating Rate Notes, by its acquisition of this Note, each Holder (which includes each holder of a beneficial interest in this Note) acknowledges, accepts, consents to and agrees: (i) to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority, which may include and result in any of the following, or some combination thereof: the reduction of all, or a portion, of the Amounts Due on a permanent basis; the conversion of all, or a portion, of the Amounts Due into Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person (and the issue to the Holder of such Common Equity Tier 1 instruments, securities or obligations), including by means of an amendment, modification or variation of the terms of the Floating Rate Notes, in which case the Holder agrees to accept in lieu of its rights under this Note, any such Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person; the cancellation of this Note or Amounts Due; the amendment or alteration of the maturity of this Note or amendment of the interest payable on this Note, or the date on which the interest becomes payable, including by suspending payment for a temporary period; and (ii) that the terms of this Note are subject to, and may be varied, if necessary, to give effect to, the exercise of the Bail-in Power by the Relevant Resolution Authority.
“Amounts Due” means the principal amount of, premium, if any, together with any accrued but unpaid interest, and Additional Amounts, if any, due on the Floating Rate Notes. References to such amounts will include amounts that have become due and payable, but which have not been paid, prior to the exercise of the Bail-in Power by the Relevant Resolution Authority.
“Bail-in Power” means any power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the Kingdom of Spain, relating to (i) the transposition of the BRRD, and in particular its article 59 (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), (ii) the SRM Regulation and (iii) the instruments, rules or standards created thereunder, pursuant to which any obligation of a Regulated Entity (or an affiliate of such Regulated Entity) can be reduced, cancelled, suspended, modified, or converted into shares, other securities, or other obligations of such Regulated Entity (or affiliate of such Regulated Entity).
“BRRD” means Directive 2014/59/EU of 15 May establishing the framework for the recovery and resolution of credit institutions and investment firms or such other directive as may amend or come into effect in place thereof, as implemented into law by Law 11/2015 and RD 1012/2015, as amended or replaced from time to time and including any other relevant implementing regulatory provisions.
B-15
“RD 1012/2015” means Royal Decree 1012/2015, of 6 November developing Law 11/2015, as amended or superseded from time to time.
“Regulated Entity” means any entity to which BRRD, as implemented in the Kingdom of Spain (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), or any other Spanish law relating to the Bail-in Power, applies, which includes, certain credit institutions, investment firms, and certain of their parent or holding companies.
“Relevant Resolution Authority” means the Spanish Fund for the Orderly Restructuring of Banks, the Bank of Spain, the European Single Resolution Board, as the case may be, according to Law 11/2015, and any other entity with the authority to exercise the Bail-in Power or any other resolution power from time to time.
“SRM Regulation” means Regulation (EU) No. 806/2014 of the European Parliament and of the Council of 15 July 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of the Single Resolution Mechanism and the Single Resolution Fund and amending Regulation (EU) No. 1093/2010, as amended or replaced from time to time.
The exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Floating Rate Notes shall not constitute an event of default and the terms and conditions of the Floating Rate Notes shall continue to apply in relation to the residual principal amount of, or outstanding amount payable with respect to, the Floating Rate Notes subject to any modification of the amount of distributions payable to reflect the reduction of the principal amount, and any further modification of the terms that the Relevant Resolution Authority may decide in accordance with applicable laws and regulations relating to the resolution of credit institutions, investment firms and/or Company entities incorporated in the relevant member state.
No repayment or payment of Amounts Due, if any, on the Floating Rate Notes, will become due and payable or be paid after the exercise of any Bail-in Power by the Relevant Resolution Authority if and to the extent such amounts have been reduced, converted, cancelled, amended or altered as a result of such exercise.
By its acquisition of this Note, each Holder of this Note, (which, for the purposes of this clause, includes each Holder of a beneficial interest in this Note), to the extent permitted by the Trust Indenture Act, will waive any and all claims, in law and/or in equity, against the Trustee for, agree not to initiate a suit against the Trustee in respect of, and agree that the Trustee will not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to this Note.
Additionally, by its acquisition of this Note, each Holder of this Note acknowledges and agrees that, upon the exercise of the Bail-in Power by the Relevant Resolution Authority:
(i) the Trustee will not be required to take any further directions from the Holders of the Floating Rate Notes with respect to any portion of the Floating Rate Notes that are written-down, converted to equity and/or cancelled under the Senior Preferred Debt Securities Indenture, which authorizes Holders of a majority in aggregate outstanding principal amount of the outstanding Floating Rate Notes to direct certain actions relating to the Floating Rate Notes; and
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(ii) the Senior Preferred Debt Securities Indenture will not impose any duties upon the Trustee whatsoever with respect to the exercise of the Bail-in Power by the Relevant Resolution Authority;
provided, however, that notwithstanding the exercise of the Bail-in Power by the Relevant Resolution Authority, so long as the Floating Rate Notes remain outstanding, there will at all times be a Trustee for the Floating Rate Notes in accordance with the Senior Preferred Debt Securities Indenture, and the resignation and/or removal of the Trustee and the appointment of a successor Trustee will continue to be governed by the Base Indenture, including to the extent no additional supplemental indenture or amendment is agreed upon in the event the Floating Rate Notes remain outstanding following the completion of the exercise of the Bail-in Power.
By its acquisition of this Note, each Holder of this Note acknowledges and agrees that neither a cancellation or deemed cancellation of the principal or interest (in each case, in whole or in part), nor the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Floating Rate Notes will give rise to a default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act.
By purchasing this Note, each Holder (including each beneficial owner) of this Note shall be deemed to have authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds this Note to take any and all necessary action, if required, to implement the exercise of the Bail-in Power with respect to the Floating Rate Notes as it may be imposed, without any further action or direction on the part of such Holder.
Each Holder of this Note also acknowledges and agrees that the foregoing description of the Bail-in Power and its exercise is exhaustive on the matters described herein to the exclusion of any other agreements, arrangements or understandings relating to the application of any Bail-in Power to the Floating Rate Notes.
Each Holder of this Note that acquires such Floating Rate Notes in the secondary market (including each beneficial owner) shall be deemed to acknowledge, agree to be bound by and consent to the same provisions specified herein to the same extent as the Holders of the Floating Rate Notes that acquire the Floating Rate Notes upon their initial issuance, including, without limitation, with respect to the acknowledgment and agreement to be bound by and consent to the terms of the Floating Rate Notes, including in relation to the Bail-in-Power.
Additional terms of the Floating Rate Notes, including but not limited to events of default, remedies, payment of additional amounts in respect of withholding tax, substitution and variation of the Floating Rate Notes upon certain regulatory events, and amendment are set forth in the Senior Preferred Debt Securities Indenture.
The Senior Preferred Debt Securities Indenture and the Floating Rate Notes shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the choice of law provisions), except for Section 2.02 of the Senior Preferred Debt Securities Indenture, Section 2.02(t) of the Third Supplemental Indenture and the status of the Floating Rate Notes, which shall be governed by and construed in accordance with the laws of The Kingdom of Spain, and except that the authorization and execution by the Company of the Senior Preferred Debt Securities Indenture and the Floating Rate Notes shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of organization of the Company and the Trustee, as the case may be.
The Floating Rate Notes and this Note have been issued in the State of New York.
B-17
Exhibit 5.1
Príncipe de Vergara, 187
Plaza de Rodrigo Uría
28002 Madrid - España
Tel. +34 91 586 04 00
Fax +34 91 586 04 03/04
www.uria.com
Tel. (d): +34 91 586 07 96
Fax (d): +34 91 586 04 71
Banco Santander, S.A.
Ciudad Grupo Santander, Avenida de Cantabria s/n
28660 Boadilla del Monte Madrid
Spain
Madrid, 24 May 2022
Dear Sirs,
U.S.$1,500,000,000 3.892% Senior Preferred Fixed Rate Notes due 2024 and U.S.$650,000,000
Senior Preferred Floating Rate Notes due 2024
We write to you as Spanish counsel to Banco Santander, S.A. (the “Bank”) for the purposes of, among others, issuing a legal opinion in connection with the issuance by the Bank of U.S.$1,500,000,000 3.892% Senior Preferred Fixed Rate Notes due 2024 and U.S.$650,000,000 Senior Preferred Floating Rate Notes due 2024 (the “Notes”) pursuant to the Bank’s registration statement on Form F-3 dated 14 May 2020 filed with the United States Securities and Exchange Commission (the “SEC”) under the United States Securities Act of 1933, as amended (the “Registration Statement”).
| A. | Documents and information reviewed |
In arriving at our opinions, we have reviewed the documents and information listed in the Schedule 1 (the “Documents”).
| B. | Assumptions |
Our opinions are based on the following assumptions:
| (a) | All signatures, stamps and seals on the Documents are genuine. |
| (b) | The original Documents we have received are authentic and complete. Any copies we have received are complete and correspond to the originals. |
| (c) | The drafts of the Documents reviewed are the same as the Documents that were executed and approved. |
| (d) | All the parties to the Documents (other than the Bank) have been duly organised and validly exist under the laws of their respective countries of incorporation. |
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| (e) | All the parties to the Documents (other than the Bank) have the corporate power to perform the transactions and be a party to the contracts contemplated in the Documents and the contracts have been signed by an individual or individuals who have sufficient capacity to validly and effectively bind the parties to the same and compliance with that established in the contracts is within the legal capacity of each of the parties thereto (other than the Bank). |
| (f) | Each person who signed the Documents on behalf of the Bank had the legal capacity (capacidad de obrar) to do so at the time. |
| (g) | All the documents that should have been filed with the Commercial Registry of Cantabria by the Bank had been filed and registered on or before the date of our search, and subsequent to this no other documents that bear any relation to the opinions expressed in this legal opinion have been filed or registered. |
The content of the commercial registry excerpt issued by the Commercial Registry of Cantabria in relation to the Bank on 4 May 2022 and the information issued electronically by the website www.rmc.es on the date of this legal opinion and the website of the Insolvency Register (www.publicidadconcursal.es) accurately reflect the registered information about the Bank.
The information held at the Commercial Registry is assumed to be correct and valid pursuant to article 7 of the Commercial Registry Rules (Reglamento del Registro Mercantil).
| (h) | The certificates of the corporate resolutions reviewed are true and accurate and correspond to resolutions that have been validly approved in duly convened, constituted and quorate meetings. |
| (i) | There are no contractual or other limitations that bind any of the parties to the Documents and that are included in any document that we have not reviewed but that could affect this opinion, nor are there any agreements between any of the parties to the Documents which fully or partially annul, modify or supersede the content of the Documents. |
There are no decisions or resolutions of the governing bodies of the Bank that revoke or amend the decisions and resolutions reviewed.
There are no factual circumstances that have not been disclosed to us and that could affect this legal opinion.
| (j) | The articles of association (estatutos sociales) of the Bank that we have reviewed are those in force on the date of this legal opinion. |
| (k) | The Transaction Documents and the Notes (including the Global Notes) governed by the laws of a jurisdiction other than Spain create legal, valid, binding and enforceable obligations for each party to the Transaction Documents and the Notes under such laws. |
| (l) | The obligations deriving from the Transaction Documents and the Notes (including the Global Notes) that must be complied with in a jurisdiction other than Spain, or that could be affected in any way by the laws of such other jurisdiction, will not be invalid or ineffective by virtue of the said laws, or contrary to its public policy. |
| (m) | The transactions described in, contemplated in, or financed under the Transaction Documents and the Notes are not contrary to the Bank’s corporate interest (interés social) and the Bank’s directors have not breached their duty of care (deberes de diligencia y lealtad) in relation to the transaction; and the issue of the Notes is justified in the best corporate interest (interés social) of the Bank. |
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| (n) | (i) The centre of main interests of the Bank is located in Spain; (ii) the Bank is not unable to pay its debts as per article 2 of the Insolvency Law (Ley Concursal), which restated text was approved by Royal Legislative Decree 1/2020 of 5 May (the “Insolvency Law”); (iii) the Bank will not be unable to pay its respective debts as per article 2 of the Insolvency Law as a consequence of performing its obligations under the Transaction Documents and the Notes; (iv) no petition for insolvency (concurso) or extrajudicial settlement of payments (acuerdo extrajudicial de pagos) has been filed in relation to the Bank; (v) no communication contemplated under article 583 of the Insolvency Law has been sent to the competent court in relation to the Bank; (vi) no insolvency or administrative receiver or insolvency mediator (mediador concursal) has been appointed, or their appointment sought, to oversee any of the assets of the Bank; (vii) the Bank does not fall under any ground for winding-up as set out in article 363 of the Spanish Companies Law (Ley de Sociedades de Capital), which restated text was approved by Royal Legislative Decree 1/2010 of 2 July; and (viii) the Bank is not in a situation that could determine the application of early intervention or resolution measures pursuant to Law 11/2015, of June 18, for the recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de entidades de crédito y empresas de servicios de inversión). |
| (o) | The Global Notes have been issued, authenticated and deposited in the State of New York. |
| (p) | The Notes will be admitted to trading on the New York Stock Exchange LLC prior to their first interest payment date and will not be admitted to trading on any Spanish market. |
| (q) | The Notes will not be offered, distributed or sold in Spain in any manner that is inconsistent with the Prospectus. |
| (r) | The Notes will be originally registered with a clearing and settlement system located outside Spain that is recognized by Spanish law or by the law of another OECD country. |
| (s) | The Notes qualify as debt instruments pursuant to the applicable Spanish accounting rules and regulations. |
Where we have not independently verified facts material to the opinions, we have examined and relied on certificates issued by duly authorised representatives of the Bank.
| C. | Opinion |
We do not represent ourselves to be familiar with the laws of any jurisdiction other than Spain as they stand at present and therefore express no opinion on matters arising under any laws other than the laws of Spain currently in force. This legal opinion is issued on the basis that all related-matters will be governed by, and construed in accordance with Spanish law, and that all matters between the addressees of this legal opinion and ourselves (in particular, those regarding interpretation) will be brought before the Spanish courts.
Our involvement in the transaction described has been limited to our role as Spanish counsel to the Bank, and we therefore assume no obligation to advise any other party to the transaction. Furthermore, we assume no obligation to advise the Bank or any other party of any changes to the law or facts that may occur after today’s date, regardless of whether they affect the legal analysis or conclusions in this legal opinion.
Legal concepts are expressed in some of the documents in English terms and may not be identical or equivalent to the Spanish legal terms used.
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Based on the above, and subject to the additional exceptions, limitations and qualifications set out below, it is our opinion that:
| 1. | Valid existence |
The Bank was duly incorporated and validly exists as a “sociedad anónima” under the laws of Spain.
| 2. | Corporate power |
The Bank has the required corporate power to issue the Notes.
| 3. | Corporate approvals |
The issuance of the Notes has been duly authorised by all the necessary corporate actions of the Bank.
| D. | Qualifications |
The opinions above are subject to the following:
| (i) | In the absence of case law or even settled academic doctrine on certain matters, it is impossible to rule out the possibility that a Spanish court would have a different interpretation. |
| (ii) | Our opinions are issued subject to the effects and outcome of transactions that may derive from insolvency, the recovery and resolution proceedings of credit institutions and investment firms, pre-insolvency mechanisms or any other similar proceedings that generally affect the rights of all or some creditors, including those that do not fall under judicial insolvency proceedings (in particular, but not limited to, transactions that may derive from the insolvency regulations with respect to the notice of commencement of negotiations with creditors, claw-back actions and refinancing agreements), as well as to any principles of public policy (orden público). |
| (iii) | The information available from the website www.rmc.es may not be entirely accurate or up to date. |
| (iv) | We offer no opinion as to the financial or economic reasonableness of the Transaction Documents or the transaction described herein. |
This legal opinion is rendered to the addressee identified in this letter and in connection with the transactions described above. This legal opinion is not to be used, circulated, quoted or referred to in any other way or for any other purpose, and no persons other than its addressees may make decisions based on it, nor may they claim any liability for its content without our prior written consent. Notwithstanding the foregoing, we hereby consent to the filing of this opinion as an exhibit to a current information report on Form 6-K, to be incorporated by reference in the Registration Statement and to the use of our name under the caption “Legal Opinions” in the Base Prospectus and in the Prospectus Supplement. In giving this consent, we do not admit that we are experts under the Securities Act or the rules and regulations of the SEC issued thereunder with respect to any part of the Registration Statement, including this opinion.
This opinion shall be governed exclusively by Spanish law and the courts of the city of Madrid (Spain) shall have exclusive jurisdiction to settle any dispute relating to this opinion.
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Very truly yours,
/s/ Carolina Albuerne
Carolina Albuerne
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Schedule 1.- Documents and information reviewed
| (a) | The information on the Bank publicly available on the website of the Spanish Central Commercial Registry (www.rmc.es), dated as of the date hereof; |
| (b) | a copy of the articles of association (estatutos sociales) of the Bank as publicly available at the website of the Bank (www.bancosantander.es), dated as of the date hereof; |
| (c) | a copy of a notarial deed granted on 10 March 2020 before the Notary Public of Madrid Mr. Rafael Martínez Die under the number 1,432 of his records by virtue of which, among others, the resolutions adopted by the Executive Committee of the Bank on 9 March 2020 approving the registration of the Registration Statement and the execution of the documents to which the Bank is a party in connection thereto (including the Base Indenture, as defined below) are raised to public; |
| (d) | a commercial registry excerpt with respect to the Bank regarding its due existence and the latest entries in the Commercial Registry issued by the Commercial Registry of Cantabria on 4 May 2022; |
| (e) | a copy of a notarial deed granted on 24 April 2007 before the Notary Public of Santander Mr. José María de Prada Díez under the number 1,125 of his records by virtue of which, among others, the resolutions adopted by the Board of Directors of the Bank on 26 March 2007 delegating all its powers (except those that cannot be legally delegated) on the Executive Committee are raised to public; |
| (f) | a copy of a notarial deed granted on 11 May 2022 before the Notary Public of Madrid Mr. Rafael Martínez Die under the number 2,419 of his records by virtue of which the resolutions adopted by the Executive Committee of the Bank on 9 May 2022 approving the issuance of the Notes including the terms and conditions and the execution of the documents to which the Bank is a party in connection thereto are raised to public; |
| (g) | a copy of the minutes of decisions taken by Ms. Silvana Borgatti Casale on 16 May 2022, determining, among others, the definitive principal amount of the issuance and the interest rates; |
| (h) | a copy of the notarial deed of issuance of the Notes (escritura pública de emisión) granted on 19 May 2022, before the Notary Public of Madrid, Mr. Miguel Ruiz-Gallardón García de la Rasilla, under the number 3,513 of his records, by the Bank; |
| (i) | a copy of the underwriting agreement executed on 16 May 2022 by the Bank and Barclays Capital Inc., Goldman Sachs Bank Europe SE, RBC Capital Markets, LLC, Santander Investment Securities Inc., TD Securities (USA), LLC, and Wells Fargo Securities, LLC (the “Underwriting Agreement”); |
| (j) | a copy of the senior preferred debt securities base indenture dated 30 June 2021 entered into by the Bank and The Bank of New York Mellon, London Branch, as Trustee, (the “Base Indenture”) |
| (k) | a copy of the third senior preferred debt supplemental indenture to the Base Indenture dated 24 May 2022 entered into by the Bank and The Bank of New York Mellon, London Branch, as Trustee, (this document together with the Base Indenture, the “Senior Preferred Debt Indenture”); |
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| (l) | a copy of the global notes evidencing the Notes dated 24 May 2022 (the “Global Notes”); |
| (m) | a copy of the Registration Statement which includes a base prospectus (the “Base Prospectus”) dated 14 May 2020; |
| (n) | a copy of the preliminary prospectus supplement prepared in connection with the issuance of the Notes dated 16 May 2022 (the “Preliminary Prospectus Supplement”); and |
| (o) | a copy of the final prospectus supplement prepared in connection with the issuance of the Notes dated 16 May 2022 (this document together with the Preliminary Prospectus Supplement, the “Prospectus Supplement”). |
The Underwriting Agreement and the Senior Preferred Debt Indenture will be hereinafter collectively referred to as the “Transaction Documents”.
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Exhibit 5.2
|
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+1 212 450 4000 davispolk.com |
Davis Polk & Wardwell LLP 450 Lexington Avenue New York, NY 10017 |
May 24, 2022
Banco Santander, S.A.
Ciudad Grupo Santander
Avenida de Cantabria s/n
28660 Boadilla del Monte, Madrid, Spain
Ladies and Gentlemen:
Banco Santander, S.A., a sociedad anónima incorporated under the laws of The Kingdom of Spain (the “Company”), has filed with the Securities and Exchange Commission a Registration Statement on Form F-3 (File No. 333-238243) (the “Registration Statement”) and the related prospectus (the “Prospectus”) for the purpose of registering under the Securities Act of 1933, as amended (the “Securities Act”), certain securities, including $1,500,000,000 aggregate principal amount of the Company’s 3.892% Senior Preferred Fixed Rate Notes due 2024 and $650,000,000 aggregate principal amount of the Company’s Senior Preferred Floating Rate Notes due 2024 (together, the “Senior Preferred Debt Securities”). The Senior Preferred Debt Securities are to be issued pursuant to the provisions of the Indenture dated as of June 30, 2021 (the “Base Indenture”), between the Company and The Bank of New York Mellon, London Branch, as trustee (the “Trustee”), as supplemented by the third supplemental indenture dated as of the date hereof, among the Company, The Bank of New York Mellon, London Branch, as trustee, calculation agent and principal paying agent, and The Bank of New York Mellon SA/NV, Luxembourg Branch, as registrar (the “Third Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). The Senior Preferred Debt Securities are to be sold pursuant to the underwriting agreement dated May 16, 2022 (the “Underwriting Agreement”) among the Company and the several underwriters named therein (the “Underwriters”).
We, as your counsel, have examined originals or copies of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary or advisable for the purpose of rendering this opinion.
In rendering the opinions expressed herein, we have, without independent inquiry or investigation, assumed that (i) all documents submitted to us as originals are authentic and complete, (ii) all documents submitted to us as copies conform to authentic, complete originals, (iii) all signatures on all documents that we reviewed are genuine, (iv) all natural persons executing documents had and have the legal capacity to do so, (v) all statements in certificates of public officials and officers of the Company that we reviewed were and are accurate and (vi) all representations made by the Company as to matters of fact in the documents that we reviewed were and are accurate.
Based upon the foregoing, and subject to the additional assumptions and qualifications set forth below, we advise you that, in our opinion, assuming that the Senior Preferred Debt Securities have been duly authorized, executed and delivered by the Company insofar as Spanish law is concerned, the Senior Preferred Debt Securities (other than the terms thereof expressed to be governed by Spanish law, as to which we express no opinion), when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters pursuant to the Underwriting Agreement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability and may be subject to possible judicial or regulatory actions giving effect to governmental actions or foreign laws affecting creditors’ rights.
In connection with the opinion expressed above, we have assumed that the Company is validly existing as a corporation under the laws of Spain. In addition, we have assumed that the Indenture and the Senior Preferred Debt Securities (collectively, the “Documents”) are valid, binding and enforceable agreements of each party thereto, except to the extent expressly covered above with respect to the Company. We have also assumed that the execution, delivery and performance by each party to each Document to which it is a party (a) are within its corporate powers, (b) do not contravene, or constitute a default under, the certificate of incorporation or bylaws or other constitutive documents of such party, (c) require no action by or in respect of, or filing with, any governmental body, agency or official and (d) do not contravene, or constitute a default under, any provision of applicable law, regulation or any judgment, injunction, order or decree or any agreement or other instrument binding upon such party.
We express no opinion as to (i) the provisions in the Documents relating to bail-in, (ii) any provisions in the Indenture that purport to waive objections to venue, claims that a particular jurisdiction is an inconvenient forum or the like, (iii) the effectiveness of any service of process made other than in accordance with applicable law, (iv) whether a New York State or United States federal court would render or enforce a judgment in a currency other than U.S. Dollars or (v) the exchange rate that such a court would use in rendering a judgment in U.S. Dollars in respect of an obligation in any other currency.
We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York and the federal laws of the United States, except that we express no opinion as to any law, rule or regulation that is applicable to the Company, the Documents or such transactions solely because such law, rule or regulation is part of a regulatory regime applicable to any party to any of the Documents or any of its affiliates due to the specific assets or business of such party or such affiliate. Insofar as the foregoing opinion involves matters governed by Spanish law, we have relied, without independent inquiry or investigation, on the opinion of Uría Menéndez, special legal counsel in Spain for the Company, dated as of May 24, 2022, to be filed as an exhibit to a report on Form 6-K to be filed by the Company on the date hereof concurrently with this opinion.
We hereby consent to the filing of this opinion as an exhibit to a report on Form 6-K to be filed by the Company on the date hereof and its incorporation by reference into the Registration Statement and further consent to the reference to our name under the caption “Legal Opinions” in the prospectus supplement which is a part of the Registration Statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ Davis Polk & Wardwell LLP
| May 24, 2022 | 2 |
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