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Santander UK issues £500M AT1 securities

Santander UK Group Holdings Plc said it will issue April 10 £500 million of fixed-rate reset Additional Tier 1 capital securities.

The perpetual securities, with an initial issue price of 100%, will carry a coupon of 6.75% until June 24, 2024, the first reset date. From and including each reset date to but excluding the succeeding reset date thereafter, the distribution rate will be the aggregate 5.792% plus the applicable five-year mid-swap rate.

The principal amount of the securities will automatically be written down to zero if at any time the group's common equity Tier 1 ratio, calculated on a consolidated basis, is less than 7%.

The Banco Santander SA unit's offering has already received approval from the U.K. Financial Conduct Authority. An application has been made to the U.K. Listing Authority for the securities to be admitted to the official list and to the London Stock Exchange for the securities to be admitted to trading on its regulated market.

Banco Santander, Barclays Bank Plc, Citigroup Global Markets Ltd. and Morgan Stanley & Co. International serve as managers on the deal, while Santander Global Corporate Banking is the structuring adviser. Euroclear Bank SA/NV and Clearstream Banking SA are the depositories for the issuance.