Business Context and Reporting Period
Company: Banco Santander, S.A.
Filing Type: Form 6-K (Report of Foreign Issuer)
Date: May 27, 2026
Context: The Bank announced the completion of a placement of preferred securities contingently convertible into ordinary shares (CoCos) to professional investors and eligible counterparties.
Key Financial Metrics and Capital Structure
- Issue Size: $1,500,000,000 (USD) nominal amount.
- Instrument Type: Perpetual preferred securities (CoCos) eligible as Additional Tier 1 (AT1) capital under CRR.
- Remuneration: 7.25% annual fixed rate for the first 10 years; thereafter reviewed every 5 years based on the 5-year UST rate plus a 283.7 basis point margin.
- Conversion Trigger: Automatic conversion to ordinary shares if the Common Equity Tier 1 (CET1) ratio falls below 5.125%.
- Current Capital Position: As of March 31, 2026, the consolidated CET1 ratio was 14.4%.
- Listing: Admission to trading on the New York Stock Exchange (NYSE) requested.
Material Changes and Unusual Items
This filing does not report changes in revenue, profit, or cash flow. The material event is the successful execution of the $1.5 billion CoCo issuance. Key terms include:
- Exclusion of Pre-emptive Rights: The issuance was conducted without offering pre-emptive subscription rights to existing shareholders.
- Capital Enhancement: The proceeds will bolster the Bank's Additional Tier 1 capital base.
- Discretionary Dividends: Payment of remuneration is subject to certain conditions and the Bank's discretion.
Guidance, Outlook, and Risks
Management Commentary: The Bank has filed a registration statement and prospectus with the SEC. A report regarding the basis and rules for conversion and the exclusion of pre-emptive rights is available on the Bank's website and will be presented at the next general shareholders' meeting.
Risks and Contingencies:
- Conversion Risk: Securities convert to equity if the CET1 ratio drops below 5.125%.
- Regulatory Restrictions: The securities are not offered to retail investors in the EU/UK and are subject to specific distribution restrictions in the US, Italy, Spain, and other jurisdictions (Canada, Hong Kong, Japan, China, Korea, Taiwan, Singapore, Switzerland, Australia).
- Call Option: The securities are perpetual but may be called by the Bank under certain circumstances.
Investor Verification Checklist
- Verify the full terms of the CoCos in the SEC-registered prospectus and prospectus supplement.
- Confirm the current CET1 ratio trends relative to the 5.125% conversion trigger.
- Review the "Important Information" section regarding jurisdictional restrictions on resale and distribution.
- Check the Bank's website for the directors' report on the exclusion of pre-emptive rights.
- Monitor the NYSE admission status for the new securities.