solution for Optimal Strategi
MATERIAL FACT
Further to the material fact (hecho relevante) dated 14 December 2008, the Santander Group announces that it has decided to offer a solution to its private banking clients who have invested in Optimal Strategic US Equity fund (Optional Strategic), which has been affected by the actions initiated against Bernard L. Madoff Investment Securities LLC (Madoff Securities) and the resulting liquidation of Madoff Securities.
This solution applies to its private banking clients and for the principal amount invested, net of redemptions, in Optimal Strategic, which amounts to 1,380 million euros.
The solution consists in an asset exchange, by virtue of which the private banking clients will have the right to exchange their investments in Optimal Strategic for preferred securities to be issued by the Group in the referred amount of 1,380 million euros. These preferred securities will have an annual coupon of 2% and a Santander Group call from year 10.
The pre-tax cost for the Group of this transaction would be 500 million euros, which has been fully-booked against the accounts for 2008.
The Group has taken this decision in view of the exceptional circumstances concurring in the case at hand and on the basis of purely commercial reasons, for the Group's interest in maintaining its business relationships with those clients.
The Santander Group has acted at all times with the due diligence in the management of its clients' investments in the Optimal Strategic fund and in accordance with all applicable laws and sound banking practices and procedures with respect to those investments. The sale of these products has always been transparent and in compliance with all applicable regulations and established procedures.
The Santander Group would like to note that Madoff Securities was a broker dealer authorized, registered and supervised by the SEC and was also authorized as an investment advisor by the U.S. Financial Industry Regulatory Authority (FINRA). As the SEC has publicly noted, Madoff Securities was regularly subject to inspections by this supervisory agency during the last number of years, without its reputation or standing being at all doubted by the market or the U.S. supervisory authorities.
The Group is considering the initiation of the appropriate legal actions.
Boadilla del Monte (Madrid), January 27th, 2009
_____________________________________________________________________
This announcement does not constitute an offer to sell, or a solicitation of an offer to acquire for, any securities in any jurisdiction.
This information is provided by RNS
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