Liability management: Santander conducts jumbo tender of ABS
Balance sheet strengthened to create billions in economic capital; IPO of 15% of Brazilian operation weighed
lines of Santander structured finance securities under tender
Santander maintained its reputation as a vigorous manager of its assets and liabilities in August when it unveiled a groundbreaking tender operation for 27 different lines of its outstanding structured finance securities with a nominal face value of €16.5 billion.
Santander was the first bank to return to the equity markets in November 2008 when it completed a €7.2 billion rights issue. Already among the best-capitalized and highest-rated banks, Santander is looking to strengthen its balance sheet using all avenues – either asset sales or liability management.
It looks as if it is either getting ready for M&A action or reinforcing the barricades.
In the tender operation it offered to buy bonds at prices from as low as 61% up to 95.5% of face value, at an average 18% (€3 billion) discount to par and a small premium to where the bonds were trading in the secondary market.
It comes just a couple of months after the Spanish bank booked substantial capital gains, hence enhancing its core capital position, by conducting a debt exchange worth a notional €9.1