Obligation Santander Bank 5.95% ( US05969BAC72 ) en USD

Société émettrice Santander Bank
Prix sur le marché refresh price now   100 %  ▼ 
Pays  Mexique
Code ISIN  US05969BAC72 ( en USD )
Coupon 5.95% par an ( paiement semestriel )
Echéance 30/09/2028



Prospectus brochure de l'obligation Banco Santander US05969BAC72 en USD 5.95%, échéance 30/09/2028


Montant Minimal 200 000 USD
Montant de l'émission 1 300 000 000 USD
Cusip 05969BAC7
Notation Standard & Poor's ( S&P ) N/A
Notation Moody's Baa3 ( Qualité moyenne inférieure )
Prochain Coupon 01/10/2025 ( Dans 137 jours )
Description détaillée Banco Santander est une banque multinationale espagnole, l'une des plus grandes institutions financières du monde, opérant dans plusieurs pays d'Europe, d'Amérique et d'Asie.

L'Obligation émise par Santander Bank ( Mexique ) , en USD, avec le code ISIN US05969BAC72, paye un coupon de 5.95% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 30/09/2028

L'Obligation émise par Santander Bank ( Mexique ) , en USD, avec le code ISIN US05969BAC72, a été notée Baa3 ( Qualité moyenne inférieure ) par l'agence de notation Moody's.








Strictly Confidential


Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo
Financiero Santander México

U.S.$1,300,000,000
5.950% Tier 2 Subordinated Preferred Capital Notes due 2028
Interest payable on April 1 and October 1
Issue Price: 100.000%
We are offering U.S.$1,300,000,000 of our 5.950% Tier 2 Subordinated Preferred Capital Notes due 2028 (the "Notes"). The Notes will mature on October 1, 2028, or the
"Maturity Date," unless previously redeemed as described in this offering memorandum. WE HAVE THE OPTION, BUT NOT THE
OBLIGATION, TO REDEEM THE NOTES, SUBJECT TO CERTAIN CONDITIONS SET OUT IN THIS
OFFERING MEMORANDUM, ON THE OPTIONAL CALL DATE (AS DEFINED IN THIS OFFERING
MEMORANDUM), OR AT ANY TIME IF THERE ARE SPECIFIED CHANGES IN (I) THE MEXICAN LAWS
AFFECTING THE WITHHOLDING TAX APPLICABLE TO PAYMENTS OF INTEREST UNDER THE NOTES,
(II) THE MEXICAN LAWS THAT RESULT IN A CAPITAL EVENT (AS DEFINED IN THIS OFFERING
MEMORANDUM) OR (III) THE APPLICABLE TAX LAWS THAT RESULT IN INTEREST ON THE NOTES
NOT BEING DEDUCTIBLE BY US FOR MEXICAN INCOME TAX PURPOSES. SEE "DESCRIPTION OF
NOTES--REDEMPTION" IN THIS OFFERING MEMORANDUM.
PRINCIPAL AND INTEREST ON THE NOTES WILL BE DEFERRED AND WILL NOT BE PAID UNDER
CERTAIN CIRCUMSTANCES. IF A TRIGGER EVENT (AS DEFINED IN THIS OFFERING MEMORANDUM)
OCCURS, THE PRINCIPAL AMOUNT OF THE NOTES WILL BE WRITTEN DOWN AS DESCRIBED IN THIS
OFFERING MEMORANDUM WITHOUT THE POSSIBILITY OF ANY FUTURE WRITE UP OR
REINSTATEMENT OF PRINCIPAL AND HOLDERS OF NOTES WILL AUTOMATICALLY BE DEEMED TO
HAVE IRREVOCABLY WAIVED THEIR RIGHT TO CLAIM OR RECEIVE REPAYMENT OF ANY WRITTEN
DOWN PRINCIPAL AMOUNT OF THE NOTES, AND ANY AND ALL ACCRUED AND UNPAID INTEREST
WITH RESPECT THERETO, AS FURTHER DESCRIBED IN THIS OFFERING MEMORANDUM. SEE
"DESCRIPTION OF NOTES--WRITE-DOWN." IF A CAPITAL RATIO EVENT OR A MEXICAN
REGULATORY EVENT (IN EACH CASE, AS DEFINED IN THIS OFFERING MEMORANDUM) OCCURS, WE
WILL SUSPEND PAYMENT OF INTEREST ON THE NOTES OR PAYMENT OF PRINCIPAL AT MATURITY
UNTIL THE END OF THE RELATED SUSPENSION PERIOD (AS DEFINED IN THIS OFFERING
MEMORANDUM), SUBJECT TO THE OCCURRENCE OF A WRITE-DOWN IN THE EVENT THAT DURING
SUCH SUSPENSION PERIOD A TRIGGER EVENT SHALL HAVE OCCURRED. SEE "DESCRIPTION OF
NOTES--TREATMENT OF INTEREST AND PRINCIPAL DURING A SUSPENSION PERIOD."
The Notes are denominated in U.S. dollars and will bear interest from (and including) October 1, 2018, or the "Issue Date," to (but excluding) October 1, 2023, or the
Optional Call Date, at a fixed rate per annum equal to 5.950%, payable semi-annually in arrears on April 1 and October 1 of each year (each an "Interest Payment Date"),
commencing on April 1, 2019. From (and including) the Optional Call Date to (but excluding) the Maturity Date, the Notes will bear interest at a rate that will be reset on the
Optional Call Date as described under "Description of Notes--Principal and Interest," payable semi-annually in arrears on each Interest Payment Date.
The Notes will be our general, unsecured and subordinated, preferred obligations. In the event of our bankruptcy, including liquidación or resolución (liquidation or
dissolution) under Mexican law, the Notes will rank (i) subordinate and junior in right of payment and in liquidation to all of our present and future senior indebtedness, (ii)
pari passu without preference among themselves and with all of our other present and future unsecured subordinated preferred indebtedness, and (iii) senior only to all of our
present and future subordinated and non-preferred indebtedness and all classes of our equity or capital stock, as described in this offering memorandum. See "Description of
Notes--Subordination." Payment of principal, interest and other amounts due on or with respect to the Notes may be accelerated only in the case of certain events involving
our bankruptcy, liquidation or dissolution. In accordance with the Mexican Capitalization Requirements (as defined in this offering memorandum), there will be no right of
acceleration of the then outstanding principal amount of the Notes in the case of any of the other events of default under the Indenture relating to the Notes, including a
default in the payment of principal or interest in respect of the Notes, or in the case of any write-down in respect of the Notes. See "Description of Notes--Events of Default,
Notice and Waiver." The Notes are not convertible and grant no voting rights.
THE NOTES WILL BE UNSECURED AND ARE NOT INSURED OR GUARANTEED BY THE MEXICAN
SAVINGS PROTECTION AGENCY (INSTITUTO PARA LA PROTECCIÓN AL AHORRO BANCARIO, OR
IPAB) OR ANY OTHER MEXICAN GOVERNMENT AGENCY OR BY ANY OF OUR SUBSIDIARIES OR
AFFILIATES, INCLUDING BY GRUPO FINANCIERO SANTANDER MEXICO, S.A. DE C.V., OUR MEXICAN
HOLDING COMPANY, OR BANCO SANTANDER, S.A. THE NOTES WILL BE GOVERNED BY NEW YORK
LAW; HOWEVER, CERTAIN REGULATORY AND TAX MATTERS AFFECTING THE NOTES WILL BE
GOVERNED BY THE LAWS OF MEXICO AS DESCRIBED UNDER "DESCRIPTION OF NOTES--
GOVERNING LAW; CONSENT TO JURISDICTION."
We will apply to list the Notes on the Official List of the Euronext Dublin, or "ISE," and for trading on the Global Exchange Market. However, no assurance can be given
that this application will be approved.
Investing in the Notes involves risks. See "Risk Factors" beginning on page 45.

THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE MEXICAN NATIONAL
SECURITIES REGISTRY (REGISTRO NACIONAL DE VALORES, OR RNV) MAINTAINED BY THE MEXICAN
NATIONAL BANKING AND SECURITIES COMMISSION (COMISIÓN NACIONAL BANCARIA Y DE
VALORES, OR CNBV), AND MAY NOT BE OFFERED OR SOLD PUBLICLY IN MEXICO, EXCEPT THAT THE
NOTES MAY BE OFFERED TO MEXICAN INVESTORS THAT QUALIFY AS INSTITUTIONAL OR
ACCREDITED INVESTORS, PURSUANT TO THE PRIVATE PLACEMENT EXEMPTION SET FORTH IN
ARTICLE 8 OF THE MEXICAN SECURITIES MARKET LAW (LEY DEL MERCADO DE VALORES), AS
REQUIRED UNDER THE MEXICAN SECURITIES MARKET LAW, WE WILL NOTIFY THE CNBV OF THE
OFFERING OF THE NOTES OUTSIDE OF MEXICO. SUCH NOTICE WILL BE DELIVERED TO THE CNBV
TO COMPLY WITH A LEGAL REQUIREMENT AND FOR INFORMATION PURPOSES ONLY, AND THE

DELIVERY OF SUCH NOTICE TO AND THE RECEIPT THEREOF BY THE CNBV IS NOT A REQUIREMENT
FOR THE VALIDITY OF THE NOTES AND DOES NOT IMPLY ANY CERTIFICATION AS TO THE
INVESTMENT QUALITY OF THE NOTES, OUR SOLVENCY, LIQUIDITY OR CREDIT QUALITY OR THE
ACCURACY OR COMPLETENESS OF THE INFORMATION SET FORTH HEREIN. THE INFORMATION
CONTAINED IN THIS OFFERING MEMORANDUM IS EXCLUSIVELY OUR RESPONSIBILITY AND HAS
NOT BEEN REVIEWED OR AUTHORIZED BY THE CNBV. THE ACQUISITION OF THE NOTES BY AN


INVESTOR WHO IS A RESIDENT OF MEXICO WILL BE MADE UNDER SUCH INVESTOR'S OWN
RESPONSIBILITY.
The Notes are complex financial instruments and are not a suitable or appropriate investment for all investors. In some jurisdictions, regulatory authorities have
adopted or published laws, regulations or guidance with respect to the offer or sale of securities such as the Notes to retail investors.
The Notes are not intended to be sold and should not be sold to retail clients in the European Economic Area (the "EEA"), as defined in the rules set out in the
Product Intervention (Contingent Convertible Instruments and Mutual Society Shares) Instrument 2015 (as amended or replaced from time to time) other than in
circumstances that do not and will not give rise to a contravention of those rules by any person. Prospective investors are referred to the section headed "UK
Financial Conduct Authority­Restrictions on marketing and sales to retail investors in the European Economic Area" on page iv of this offering memorandum for
further information.
This offering memorandum has been prepared on the basis that any offer of the Notes in any member state of the EEA ("Member State") wil be made pursuant to
an exemption under the Prospectus Directive from the requirement to publish a prospectus for offers of Notes. Accordingly, any person making or intending to
make an offer in that Member State of Notes which are the subject of the offering contemplated in this Offering Memorandum may only do so in circumstances in
which no obligation arises for the Issuer or any of the initial purchasers to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a
prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer. Neither we nor the initial purchasers have authorized, nor do
they authorize, the making of any offer of Notes in circumstances in which an obligation arises for the Issuer or the initial purchasers to publish or supplement a
prospectus for such offer. Neither we nor the initial purchasers have authorized, nor do they authorize, the making of any offer of Notes through any financial
intermediary, other than offers made by the initial purchasers, which constitute the final placement of the Notes contemplated in this offering memorandum.
The expression Prospectus Directive means Directive 2003/71/EC (as amended), and includes any relevant implementing measure in the Member State concerned.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), any state securities laws or the securities laws of
any other jurisdiction. Therefore, we may not offer or sell the Notes within the United States or to, or for the account or benefit of, any U.S. person, unless the offer or sale
would qualify for a registration exemption from the Securities Act and applicable state securities laws. Accordingly, we are only offering the Notes (i) to qualified
institutional buyers (as defined in Rule 144A under the Securities Act) and (ii) outside the United States to non-U.S. persons in compliance with Regulation S under the
Securities Act. See "Plan of Distribution" and "Transfer Restrictions" for additional information about eligible offerees and transfer restrictions.
None of the CNBV, the U.S. Securities and Exchange Commission (the "SEC"), or any U.S. state or foreign securities commission has approved or disapproved of these
securities or determined if this offering memorandum is accurate or complete. Any representation to the contrary is a criminal offense.
We expect that delivery of the Notes will be made to investors in book-entry form through the facilities of The Depository Trust Company ("DTC") on or about October 1,
2018.


Joint Book-Running Managers
Goldman Sachs & Co. LLC

Santander

September 20, 2018.


Table of Contents
Page
Important Notices to Readers ....................................................................................................................................... ii
Presentation of Financial and Other Information ..........................................................................................................vi
Where You Can Find More Information ......................................................................................................................ix
Incorporation by Reference ........................................................................................................................................... x
Enforcement of Civil Liabilities ...................................................................................................................................xi
Cautionary Statement Regarding Forward-Looking Statements ................................................................................ xii
Summary...................................................................................................................................................................... 14
The Offering ................................................................................................................................................................ 16
Summary Consolidated Financial Data ....................................................................................................................... 37
Risk Factors ................................................................................................................................................................. 45
Use of Proceeds ........................................................................................................................................................... 52
Capitalization ............................................................................................................................................................... 53
Description of Notes .................................................................................................................................................... 54
Taxation ....................................................................................................................................................................... 83
Benefit Plan Investor Considerations .......................................................................................................................... 89
Plan of Distribution ..................................................................................................................................................... 90
Transfer Restrictions .................................................................................................................................................... 95
General Information .................................................................................................................................................. 101
Legal Matters ............................................................................................................................................................. 101
Independent Registered Public Accounting Firm ...................................................................................................... 101
Annex A.................................................................................................................................................................... A-1

BANCO DE MÉXICO (THE "MEXICAN CENTRAL BANK") HAS AUTHORIZED THE ISSUANCE OF
THE NOTES, AS REQUIRED UNDER APPLICABLE MEXICAN LAW. FURTHERMORE, THE INDENTURE
WILL BE EXECUTED BY AN OFFICER OF THE CNBV, AS REQUIRED UNDER MEXICAN LAW.
AUTHORIZATION OF THE ISSUANCE OF THE NOTES BY THE MEXICAN CENTRAL BANK DOES NOT
ADDRESS THE LEGAL, TAX OR OTHER CONSEQUENCES TO THE HOLDERS OF THE NOTES, NOR
DOES IT IMPLY ANY CERTIFICATION AS TO THE INVESTMENT QUALITY OF THE NOTES OR AS TO
THE BANK'S SOLVENCY, LIQUIDITY OR CREDIT QUALITY, OR THE ACCURACY OR
COMPLETENESS OF THE INFORMATION SET FORTH HEREIN, OR THE TRANSLATION OF THE
TERMS OF APPLICABLE MEXICAN LAW AND REGULATION, INCLUDING ARTICLES 121 AND 122 OF
THE MEXICAN BANKING LAW (LEY DE INSTITUCIONES DE CRÉDITO), RELEVANT PROVISIONS OF
CIRCULAR 3/2012 ISSUED BY THE MEXICAN CENTRAL BANK AND THE GENERAL RULES
APPLICABLE TO MEXICAN BANKS ISSUED BY THE CNBV (DISPOSICIONES DE CARÁCTER GENERAL
APLICABLES A LAS INSTITUCIONES DE CRÉDITO).
We and the initial purchasers listed on the cover page of this offering memorandum have not authorized anyone
to provide any information other than that contained in this offering memorandum. We and the initial purchasers
take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may
give you. You should assume that the information appearing in this offering memorandum is accurate as of the date
on the front cover of this offering memorandum only. Our business, financial condition, results of operations and
prospects may have changed since that date. Neither the delivery of this offering memorandum nor any sale made
hereunder shall under any circumstances imply that the information herein is correct as of any date subsequent to the
date on the cover of this offering memorandum.

i


IMPORTANT NOTICES TO READERS
THE NOTES ARE NOT DEPOSITS WITH US AND ARE NOT INSURED OR
GUARANTEED BY THE UNITED STATES FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER UNITED STATES GOVERNMENTAL AGENCY
OR ANY MEXICAN GOVERNMENTAL AGENCY, INCLUDING, WITHOUT
LIMITATION, THE MEXICAN SAVINGS PROTECTION AGENCY (INSTITUTO
PARA LA PROTECCIÓN AL AHORRO BANCARIO OR "IPAB").
For the sale of the Notes in the United States, we are relying upon an exemption from registration under the
Securities Act for an offer and sale of securities that do not involve a public offering. By accepting delivery of this
offering memorandum or purchasing Notes, you will be deemed to have made certain acknowledgments,
representations, restrictions and agreements as set forth under "Transfer Restrictions" in this offering memorandum.
Neither we nor any initial purchasers are making an offer to sell the Notes in any jurisdiction except where such an
offer or sale is permitted. You should understand that you will be required to bear the financial risks of your
investment.
We are submitting this offering memorandum solely to a limited number of qualified institutional buyers in the
United States and in offshore transactions to persons other than U.S. persons so they can consider a purchase of the
Notes. This offering memorandum has been prepared solely for use in connection with the placement of the Notes,
for the listing of the Notes on the Official List of the Euronext Dublin, or "ISE," and for trading on the Global
Exchange Market. This offering memorandum may not be copied or reproduced in whole or in part. This offering
memorandum may be distributed and its contents disclosed only to prospective investors to whom it is provided and,
if you do not purchase the Notes, or the offering is terminated for any reason, this offering memorandum and other
related offering materials must be returned to the initial purchasers. This offering memorandum is personal to each
offeree and does not constitute an offer to any other person or to the public generally to subscribe for or otherwise
acquire the Notes. Distribution of this offering memorandum to any person other than the offeree and any person
retained to advise such offeree is unauthorized, and any disclosure of any of the contents hereof without our prior
written consent is prohibited. By accepting delivery of this offering memorandum, you are deemed to have agreed to
these restrictions.
By your purchase of the Notes, you will also be deemed to have acknowledged that (i) neither we nor any
person representing us, including the initial purchasers, has made any representation to you with respect to us or the
offering and sale of the Notes other than the information contained in this offering memorandum and, if given or
made, any such other information or representation must not be relied upon as having been authorized by us or any
person representing us, including the initial purchasers, (ii) you have received a copy of this offering memorandum
and have had access to such financial and other information, including the information in this offering
memorandum, and have been offered the opportunity to ask us questions and received answers thereto, as you
deemed necessary in connection with the decision to purchase the Notes, and (iii) you are relying only on the
information contained in this offering memorandum in making your investment decision with respect to the Notes.
In making an investment decision, you must rely on your own examination of us and the terms of the offering and
the Notes, including the merits and risks involved.
While any Notes remain outstanding, we will make available, upon request, to any holder and any prospective
purchaser of Notes the information required pursuant to Rule 144A(d)(4)(i) under the Securities Act, during any
period in which we are not subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, or the "Exchange Act," or exempt from the requirements of the Exchange Act pursuant to
Rule 12g3-2(b) thereunder.
This offering memorandum is based on information provided by us and other sources that we believe to be
reliable. Neither we nor the initial purchasers can assure you that such information provided is accurate or
complete. This offering memorandum summarizes certain documents and other information and we refer you to
them for a more complete understanding of what we discuss in this offering memorandum.
ii


We are not making any representation to any purchaser regarding the legality of an investment in the Notes by
such purchaser under any legal investment or similar laws or regulations. You should not consider any information
in this offering memorandum to be legal, business or tax advice. You should consult your own counsel, accountant,
business advisor and tax advisor for legal, tax, business and financial advice regarding any investment in the Notes.
You should contact us or the initial purchasers with any questions about this offering or if you require additional
information to verify the information contained in this offering memorandum.
This offering memorandum does not constitute an offer of, or an invitation by or on behalf of, us or the initial
purchasers or any of our or their respective directors, officers or affiliates to subscribe for or purchase any securities
in any jurisdiction to any person to whom it is unlawful to make such an offer in such jurisdiction. You must comply
with all applicable laws and regulations in force in your jurisdiction and you must obtain any consent, approval or
permission required by you for the purchase, offer or sale of the Notes under the laws and regulations in force in
your jurisdiction to which you are subject or in which you make such purchase, offer or sale, and neither we nor the
initial purchasers will have any responsibility therefor.
The Notes will be issued under an indenture to be entered into among Banco Santander (México), S.A.,
Institución de Banca Múltiple, Grupo Financiero Santander México, as issuer, and The Bank of New York Mellon,
as trustee, paying agent, transfer agent and registrar (the "Indenture"), which will be acknowledged by an officer of
CNBV.
The Notes may not be offered or sold, directly or indirectly, in Mexico or to any resident of Mexico, except as
permitted by applicable Mexican law.
This offering memorandum contains some of our trademarks, trade names and service marks, including our
logos. Each trademark, trade name or service mark of any company appearing in this offering memorandum belongs
to its respective holder.
We reserve the right to withdraw this offering of the Notes at any time, and we and the initial purchasers reserve
the right to reject any commitment to subscribe for the Notes in whole or in part, for any reason, and to allot to any
prospective investor less than the full amount of Notes sought by that investor. The initial purchasers and certain
related entities may acquire for their own account a portion of the Notes.
The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or
otherwise made available to any retail investor in the European Economic Area ("EEA"). For these purposes, a retail
investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of
Directive 2014/65/EU (as amended, "MiFID II"); or (ii) a customer within the meaning of Directive 2002/92/EC (as
amended, the "Insurance Mediation Directive"), where that customer would not qualify as a professional client as
defined in point (10) of Article 4(1) of MiFID II. Consequently no key information document required by
Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Notes or otherwise
making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or
otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
This offering memorandum has been prepared on the basis that any offer of Notes in any Member State of the EEA
will be made pursuant to an exemption under the Prospectus Directive from the requirement to publish a prospectus
for the offer of the Notes. The expression "Prospectus Directive" means Directive 2003/71/EC (as amended), and
includes any relevant implementing measure in the Member State concerned.
This offering memorandum is for distribution only to persons who (i) have professional experience in matters
relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (as amended, the "Financial Promotion Order"), (ii) are persons falling within Article
49(2)(a) to (d) ("high net worth companies, unincorporated associations etc") of the Financial Promotion Order, (iii)
are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment
activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the
issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such
persons together being referred to as "relevant persons"). This offering memorandum is directed only at relevant
persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or
iii


investment activity to which this offering memorandum relates is available only to relevant persons and will be
engaged in only with relevant persons.
U.K. Financial Conduct Authority--Restrictions on marketing and sales of the Notes to retail investors in
the European Economic Area
The Notes described in this offering memorandum are complex financial instruments and are not a suitable or
appropriate investment for all investors. In some jurisdictions, regulatory authorities have adopted or published laws,
regulations or guidance with respect to the offer or sale of securities such as the Notes to retail investors.
In particular, in June 2015, the U.K. Financial Conduct Authority (the "FCA") published the Product
Intervention (Contingent Convertible Instruments and Mutual Society Shares) Instrument 2015 which took effect
from October 1, 2015 (the "PI Instrument"). Under the rules set out in the PI Instrument (as amended or replaced
from time to time, the "PI Rules"), (i) certain contingent write-down or convertible securities (including any
beneficial interests therein), such as the Notes, must not be sold to retail clients in the EEA, and (ii) there must not
be any communication or approval of an invitation or inducement to participate in, acquire or underwrite such Notes
(or the beneficial interest in such Notes) where that invitation or inducement is addressed to or disseminated in such
a way that it is likely to be received by a retail client in the EEA (in each case, within the meaning of the PI Rules),
other than in accordance with the limited exemptions set out in the PI Rules.
The initial purchasers are subject to, and required to comply with, the PI Rules, or, if not subject to the PI Rules,
they will comply with them as if they were subject to the PI Rules. By purchasing, or making or accepting an offer
to purchase, any Notes (or a beneficial interest in such Notes) from the Issuer and/or any initial purchaser or its
affiliates, you represent, warrant, agree with and undertake to the Issuer, each of the initial purchasers and each of
their affiliates that:
(i) you are not a retail client in the EEA (as defined in the PI Rules);
(ii) whether or not you are subject to the PI Rules, you will not:
(a) sell or offer the Notes (or any beneficial interests therein) to retail clients in the EEA; or;
(b) communicate (including the distribution of the Preliminary Offering Memorandum or the final offering
memorandum relating to the Notes) or approve an invitation or inducement to participate in, acquire or
underwrite the Notes (or any beneficial interests therein) where that invitation or inducement is
addressed to or disseminated in such a way that it is likely to be received by a retail client in the EEA
(in each case, within the meaning of the PI Rules),
in any such case other than (i) in relation to any sale or offer to sell the Notes (or any beneficial interests
therein) to a retail client in or resident in the United Kingdom, in circumstances that do not and will not
give rise to a contravention of the PI Rules by any person and/or (ii) in relation to any sale or offer to sell
the Notes (or any beneficial interests therein) to a retail client in any EEA member state other than the
United Kingdom, where (a) you have conducted an assessment and concluded that the relevant retail client
understands the risks of an investment in the Notes (or such beneficial interests therein) and is able to bear
the potential losses involved in an investment in the Notes (or such beneficial interests therein) and (b) you
have at all times acted in relation to such sale or offer in compliance with MiFID II to the extent it applies
to you or, to the extent MiFID II does not apply to you, in a manner which would be in compliance with
MiFID II if it were to apply to you; and
(iii) you will at all times comply with all applicable laws, regulations and regulatory guidance (whether inside
or outside the EEA) relating to the promotion, offering, distribution and/or sale of the Notes (or any
beneficial interests therein), including (without limitation) the restrictions contained in the section titled
"Plan of Distribution" of the Preliminary Offering Memorandum and any such laws, regulations and
regulatory guidance relating to determining the appropriateness and/or suitability of an investment in the
Notes (or any beneficial interests therein) by investors in any relevant jurisdiction.
iv


Potential investors should inform themselves of, and comply with, any applicable laws, regulations or
regulatory guidance with respect to any resale of the Notes (or any beneficial interests therein), including the PI
Rules.
Where acting as agent on behalf of a disclosed or undisclosed client when purchasing, or making or accepting
an offer to purchase, any Notes (or any beneficial interests therein) from the Issuer, any initial purchaser and/or any
initial purchaser affiliate, the foregoing representations, warranties, agreements and undertakings will be given by
and be binding upon both the agent and its underlying client.

In connection with the issue of the Notes, Goldman Sachs & Co. LLC (the "Stabilization Manager") (or
persons acting on behalf of the Stabilization Manager) may over-allot Notes or effect transactions with a view to
supporting the market price of the Notes at a level higher than that which might otherwise prevail. However,
stabilization may not necessarily occur. Any stabilization action may begin on or after the date on which adequate
public disclosure of the terms of the offer of the Notes is made and, if begun, may cease at any time, but it must end
no later than the earlier of 30 days after the issue date of the Notes and 60 days after the date of the allotment of the
Notes. Any stabilization action or over-allotment must be conducted by the Stabilization Manager (or person(s)
acting on behalf of the Stabilization Manager) in accordance with all applicable laws and rules.
v


PRESENTATION OF FINANCIAL AND OTHER INFORMATION
Definitions
Unless otherwise indicated or the context otherwise requires, all references in this offering memorandum to
"Banco Santander Mexico," the "Bank," "we," "our," "ours," "us" or similar terms, refer to Banco Santander
(México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México, together with its consolidated
subsidiaries.
When we refer to "Banco Santander Parent" or the "Parent," we refer to our controlling shareholder, Banco
Santander, S.A., a Spanish bank.
When we refer to "Former Holding Company," we refer to Grupo Financiero Santander México, S.A.B. de
C.V., our former parent company. When we refer to "Grupo Financiero Santander Mexico" we refer to Grupo
Financiero Santander México, S.A. de C.V. our new parent company as of January 1, 2018, which is not a public
company and is a wholly-owned subsidiary of Banco Santander Parent. When we refer to Casa de Bolsa
Santander, S.A. de C.V., Grupo Financiero Santander México, a Mexican broker-dealer, we refer to the Former
Holding Company's brokerage subsidiary, which is now owned by Grupo Financiero Santander México.
When we refer to "Gestión Santander," we refer to SAM Asset Management, S.A. de C.V., Sociedad Operadora
de Sociedades de Inversión (formerly known as Gestión Santander, S.A. de C.V., Grupo Financiero Santander
México) (entity sold in December 2013). When we refer to "Seguros Santander" we refer to Zurich Santander
Seguros México, S.A. (formerly known as Seguros Santander, S.A., Grupo Financiero Santander) (entity sold in
November 2011).
When we refer to the "Santander Group," we refer to the worldwide Banco Santander Parent conglomerate and
its consolidated subsidiaries.
Unless otherwise indicated, all references in this offering memorandum to "initial purchasers" refer to Goldman
Sachs & Co. LLC and Santander Investment Securities Inc.
References in this offering memorandum to certain financial terms have the following meanings:
References to "IFRS" are to the International Financial Reporting Standards as issued by the International
Accounting Standards Board ("IASB") and interpretations issued by the IFRS Interpretations Committee.
References to "Mexican Banking GAAP" are to the accounting standards and regulations prescribed by the
CNBV for credit institutions, as amended.
References to our "audited financial statements" are to the audited consolidated financial statements of
Banco Santander Mexico as of December 31, 2016 and 2017, and for each of the fiscal years ended
December 31, 2015, 2016 and 2017, together with the notes thereto. The audited financial statements were
prepared in accordance with IFRS and are contained in our annual report on Form 20-F for the year ended
December 31, 2017, which is incorporated by reference into this offering memorandum.
References to our "unaudited condensed consolidated interim financial statements" are to the unaudited
condensed consolidated interim financial statements of Banco Santander Mexico as of June 30, 2018 and
for each of the six-month periods ended June 30, 2017 and 2018, together with the notes thereto. The
unaudited condensed consolidated interim financial statements were prepared in accordance with IFRS and
are contained in our report on Form 6-K, dated September 18, 2018, which is incorporated by reference
into this offering memorandum.
References herein to "UDIs" are to Unidades de Inversión, a peso-equivalent unit of account indexed for
Mexican inflation. UDIs are units of account created by the Mexican Central Bank on April 4, 1995, the
value of which in pesos is indexed to inflation on a daily basis, as measured by the change in the National
Consumer Price Index (Índice Nacional de Precios al Consumidor). Under a UDI-based loan or financial
instrument, the borrower's nominal peso principal balance is converted either at origination or upon
vi


restructuring to a UDI principal balance and interest on the loan or financial instrument is calculated on the
outstanding UDI balance of the loan or financial instrument. Principal and interest payments are made by
the borrower in an amount of pesos equivalent to the amount due in UDIs at the stated value of UDIs on the
day of payment. As of June 30, 2018 and December 31, 2017, one UDI was equal to Ps.6.012993
(U.S.$0.3054) and Ps.5.934551 (U.S.$0.3018), respectively.
For terms relating to our capital adequacy, see "Description of Notes--Terms Relating to Our Capital
Adequacy."
In this offering memorandum, the term "Mexico" refers to the United Mexican States. The terms "Mexican
government" or the "government" refer to the federal government of Mexico, and the term "Mexican Central Bank"
refers to Banco de México. References to "U.S.$," "U.S. dollars" and "dollars" are to United States dollars, and
references to "Mexican pesos," "pesos," or "Ps." are to Mexican pesos. References to "euros" or "" are to the
common legal currency of the member states participating in the European Economic and Monetary Union.
Financial and Other Information
Market position. We make statements in this offering memorandum about our competitive position and market
share in the Mexican financial services industry and the market size of the Mexican financial services industry. We
have made these statements on the basis of statistics and other information from third-party sources, primarily the
CNBV, that we believe are reliable.
Currency and accounting standards. We maintain our financial books and records in pesos. Our consolidated
income statement data for each of the years ended December 31, 2014, 2015, 2016 and 2017 and our consolidated
balance sheet data as of January 1, 2014 and as of December 31, 2014, 2015, 2016 and 2017, incorporated by
reference in this offering memorandum, have been audited under the standards of the Public Company Accounting
Oversight Board ("PCAOB"), and are prepared in accordance with IFRS. Our unaudited condensed consolidated
income statement data for the six months ended June 30, 2017 and 2018 and our consolidated balance sheet as of
December 31, 2017 and June 30, 2018 are also prepared in accordance with IFRS. For regulatory purposes,
including Mexican Central Bank regulations and the reporting requirements of the CNBV, we concurrently prepare
and will continue to prepare and make available to our shareholders, statutory financial statements in accordance
with Mexican Banking GAAP, which prescribes generally accepted accounting criteria for all financial institutions
in Mexico.
We adopted IFRS in 2014. While we have prepared our consolidated financial data as of January 1, 2014, for
the years ended December 31, 2014, 2015, 2016 and 2017 and for the six months ended June 30, 2017 and 2018 in
accordance with IFRS, data reported by the CNBV for the Mexican financial sector as a whole as well as individual
financial institutions in Mexico, including our own, is prepared in accordance with Mexican Banking GAAP and,
thus, may not be comparable to our results prepared in accordance with IFRS. IFRS differs in certain significant
respects from Mexican Banking GAAP. All statements in this offering memorandum and the documents
incorporated by reference herein regarding our relative market position and financial performance vis-à-vis the
financial services sector in Mexico, including financial information as to net income, return-on-average equity and
non-performing loans, among others, are based, out of necessity, on information obtained from CNBV reports, and
accordingly are presented in accordance with Mexican Banking GAAP. Unless otherwise indicated, all financial
information provided, or incorporated by reference, in this offering memorandum has been prepared in accordance
with IFRS.
Effect of rounding. Certain amounts and percentages included, or incorporated by reference, in this offering
memorandum and in our audited financial statements have been rounded for ease of presentation. Percentage figures
included in this offering memorandum have not in all cases been calculated on the basis of such rounded figures but
on the basis of such amounts prior to rounding. For this reason, certain percentage amounts may vary from those
obtained by performing the same calculations using the figures in our audited financial statements. Certain other
amounts may not sum due to rounding.
Exchange rates and translation into U.S. dollars. This offering memorandum and the documents incorporated
by reference herein contain translations of certain peso amounts into U.S. dollars at specified rates solely for your
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convenience. These translations should not be construed as representations by us that the peso amounts actually
represent such U.S. dollar amounts or could, at any time, be converted into U.S. dollars at the rate indicated. Unless
otherwise indicated, we have translated peso amounts into U.S. dollars at an exchange rate of Ps.19.69 to U.S.$1.00,
the rate calculated on June 29, 2018 (the last business day in June) and published on July 2, 2018 in the Federal
Official Gazette (Diario Oficial de la Federación) by the Mexican Central Bank, as the exchange rate for the
payment of obligations denominated in currencies other than pesos and payable within Mexico (tipo de cambio para
solventar obligaciones denominadas en moneda extranjera). The translation of income statement transactions
expressed in pesos using such rates may result in presentation of dollar amounts that differ from the U.S. dollar
amounts that would have been obtained by translating Mexican pesos into U.S. dollars at the exchange rate
prevailing when such transactions were recorded. See "Item 1. Selected Consolidated Financial Data--Exchange
Rates" in our report on Form 6-K dated September 18, 2018 and "Item 3. Key Information--A. Selected Financial
Data--Exchange Rates" included in our annual report on Form 20-F for the year ended December 31, 2017 for
information regarding exchange rates between the peso and the U.S. dollar for the periods specified therein.
Refinements to our impairment models. During 2015, we revised our estimates for allowance for impairment
losses on loans and receivables of all loan portfolios and for the provision for off-balance sheet risk with the purpose
of making certain refinements to the impairment models as part of our policy to continuously refine the existing
impairment models and accounting estimates. Our application of these refined models for the year ended
December 31, 2015 does not materially affect the comparability of our financial position, results of operations and
several financial measures when compared to prior years. See Note 2.h to our audited financial statements included
in our annual report on Form 20-F for the year ended December 31, 2017 for more details on our change in
accounting estimates regarding our refinements to impairment models.
New impairment model. IFRS 9 Financial instruments establishes new recognition and measurement
requirements for financial instruments and became mandatory for financial statement periods commencing January
1, 2018. As of January 1, 2018, we now classify our financial assets in the following measurement categories: (i)
those to be measured subsequently at fair value (either through other comprehensive income or through profit or
loss) and (ii) those to be measured at amortized cost. We determine the applicable category of a financial asset based
on the business model for managing that financial asset. We applied IFRS 9 in a retrospective manner, by adjusting
the opening balance of affected financial instruments at January 1, 2018, without restating prior period amounts.
Regarding the recognition of credit risk impairment, the most important change is that the new accounting standard
introduces the concept of expected loss, whereas the previous model was based on incurred loss. As of January 1,
2018, the allowance for impairment losses and provisions for off-balance sheet risk increased from Ps.17,961
million to Ps.21,217 million as result of the application of IFRS 9. The Bank has applied these requirements in a
retrospective manner, by adjusting the opening balance at January 1, 2018, without restating the comparative
consolidated financial statements, and as a result, there was no income statement impact. The primary reasons for
this increase are the requirements to recognize (i) an allowance for impairment losses for the expected life of the
transaction for financial instruments where a significant risk increase has been identified after initial recognition and
(ii) use of forward-looking information as the application of this impairment methdology looks to whether there has
been a significant increase in credit risk in the allowance for impairment losses and in the provisions for off-balance
sheet risk. See Note 1.b to our audited financial statements included in our annual report on Form 20-F for the year
ended December 31, 2017 incorporated by reference herein and Note 1.b, Note 1.c and Note 2.b to our unaudited
condensed consolidated financial statements included in our report on Form 6-K dated September 18, 2018.
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Document Outline