Santander Brazil Surrenders 4.41% to Qatari Bondholder

Spain’s Banco Santander has transferred roughly 4.41% of its Santander Brasil subsidiary to a Qatari government vehicle holding its convertible bonds, exercising an option to covert the notes ahead of schedule as it looks to meet capital requirements. Santander transferred the shares to a third party that would then deliver them to the convertible bond holders, the bank says. The Brazilian unit had transferred to its parent ADRs representing approximately 5.18% of the unit. In October 2010, Santander sold $2.72bn in 6.75% of 2013 convertible bonds to Qatari Holdings, which were convertible into shares at Santander’s discretion at exchange price of BRL23.75 per share. Santander Brasil shares closed at BRL15.34 Monday. The decision to exercise its right to convert the bonds is one of several ways the bank is trying to meet 9% core capital ratio requirement established by the European Banking Association. Santander officials could not immediately be reached for additional comment. The Spanish bank has been shedding asset in Latin America, and cut costs, most recently by laying 15 people from its New York offices in December. Rivals ING and RBS have also recently reduced their LatAm teams in NYC.