Obligation Santanderio 2.1% ( US80283LAY92 ) en USD

Santanderio

100 % ▲

Royaume-Uni

US80283LAY92 ( en USD )

2.1% par an ( paiement semestriel )

12/01/2023 - Obligation échue

Prospectus brochure de l'obligation Santander US80283LAY92 en USD 2.1%, échue

200 000 USD

1 250 000 000 USD

80283LAY9

A ( Qualité moyenne supérieure )

A1 ( Qualité moyenne supérieure )

Santander est une banque multinationale espagnole offrant une large gamme de services financiers à travers le monde.

L'Obligation émise par Santanderio ( Royaume-Uni ) , en USD, avec le code ISIN US80283LAY92, paye un coupon de 2.1% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 12/01/2023

L'Obligation émise par Santanderio ( Royaume-Uni ) , en USD, avec le code ISIN US80283LAY92, a été notée A1 ( Qualité moyenne supérieure ) par l'agence de notation Moody's.

L'Obligation émise par Santanderio ( Royaume-Uni ) , en USD, avec le code ISIN US80283LAY92, a été notée A ( Qualité moyenne supérieure ) par l'agence de notation Standard & Poor's ( S&P ).

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TABLE OF CONTENTS
TABLE OF CONTENTS
Table of Contents
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-232887
CALCULATION OF REGISTRATION FEE

Amount to be
Maximum Offering Price Per
Maximum Aggregate Offering
Amount of Registration
Class of Securities Offered

Registered

Unit

Price

Fee(1)

2.100% Notes due 2023

$1,250,000,000

99.939%

$1,249,237,500

$162,151.03

(1)
The registration fee is calculated in accordance with Rule 457(r) under the Securities Act of 1933.
PROSPECTUS SUPPLEMENT
(To Prospectus dated July 30, 2019)
Santander UK plc
$1,250,000,000 2.100% Notes due 2023
The 2.100% Notes due January 13, 2023, which we refer to as the "notes," will bear interest at a rate of 2.100% per year. We will pay interest on the notes each January 13 and
July 13, and on the maturity date of the notes, commencing on July 13, 2020.
Unless we redeem the notes earlier, the notes will mature on January 13, 2023. There is no sinking fund for the notes.
We may redeem all but not some of the notes at any time at 100% of their principal amount plus accrued interest if certain tax events described in this prospectus supplement and the
accompanying prospectus occur.
The notes will be issued in denominations of $200,000 and in multiples of $1,000 in excess thereof. The notes will constitute our direct, unconditional, unsecured and unsubordinated
obligations ranking pari passu and without preference among themselves, and will rank (subject to any applicable statutory provisions) at least equally with all our other outstanding unsecured
and unsubordinated obligations, present and future.
Notwithstanding any other term of the notes, the indenture or any other agreements, arrangements, or understandings between Santander UK plc (the "issuer") and any
holder of notes, by its acquisition of the notes, each holder of notes (including each holder of a beneficial interest in the notes) acknowledges, accepts, agrees to be bound by and
consents to: (a) the effect of the exercise of the UK bail-in power (as defined below) by the relevant UK resolution authority (as defined below) whether or not imposed with prior
notice, that may include and result in any of the following, or some combination thereof: (i) the reduction of all, or a portion, of the Amounts Due (as defined below); (ii) the
conversion of all, or a portion, of the Amounts Due on the notes into shares, other securities or other obligations of the issuer or another person (and the issue to or conferral on the
holders of notes of such shares, securities or obligations), including by means of an amendment, modification or variation of the terms of the notes; (iii) the cancellation of the notes;
(iv) the amendment or alteration of the maturity of the notes or amendment of the amount of interest payable on the notes, or the date on which the interest becomes payable,
including by suspending payment for a temporary period; and (b) the variation of the terms of the notes, if necessary, to give effect to the exercise of the UK bail-in power by the
relevant UK resolution authority.
For these purposes, "Amounts Due" are the principal amount of, and accrued but unpaid interest, including any Additional Amounts due on, the notes. References to
principal and interest will include payments of principal and interest that have become due and payable but which have not been paid, prior to the exercise of any UK bail-in power
by the relevant UK resolution authority.
As used in this prospectus supplement, the "UK bail-in power" is any write-down, conversion, transfer, modification, or suspension power existing from time to time under,
and exercised in compliance with, any laws, regulations, rules or requirements in effect in the United Kingdom, relating to the transposition of Directive 2014/59/EU establishing a
framework for the recovery and resolution of credit institutions and investment firms as amended from time to time ("BRRD"), including but not limited to the UK Banking Act
2009, as the same may be amended from time to time, including by the Financial Services (Banking Reform) Act 2013, and the instruments, rules and standards created thereunder,
pursuant to which: (i) any obligation of a regulated entity (as defined below) (or other affiliate of such regulated entity) can be reduced, cancelled, modified, or converted into shares,
other securities, or other obligations of such regulated entity or any other person (or suspended for a temporary period); and (ii) any right in a contract governing an obligation of a
regulated entity may be deemed to have been exercised.
A reference to a "regulated entity" is to any BRRD undertaking as such term is defined under the PRA Rulebook promulgated by the United Kingdom Prudential
Regulation Authority, as amended from time to time, which includes, certain credit institutions, investment firms, and certain of their parent or holding companies and a reference to
the "relevant UK resolution authority" is to the Bank of England or any other authority with the ability to exercise a UK bail-in power.
By its acquisition of the notes, each holder of the notes (including each holder of a beneficial interest in the notes), to the extent permitted by the Trust Indenture Act of
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1939, will waive any and all claims, in law and/or in equity, against the trustee for, agree not to initiate a suit against the trustee in respect of, and agree that the trustee will not be
liable for, any action that the trustee takes, or abstains from taking, in either case in accordance with the exercise of the UK bail-in power by the relevant UK resolution authority
with respect to the notes.
We intend to apply to list the notes on the New York Stock Exchange or another recognized securities exchange; however, there can be no assurance that the notes will be so listed by
the time the notes are delivered to purchasers or that the listing will be granted.
See "Risk Factors" beginning on page S-6 of this prospectus supplement and beginning on page 11 of the accompanying prospectus to read about factors you should consider
before investing in the notes.
Neither the Securities and Exchange Commission (the "Commission") nor any state securities commission has approved or disapproved of these securities or determined if
this prospectus supplement or the accompanying prospectus to which it relates is truthful or complete. Any representation to the contrary is a criminal offense.
The notes are not savings accounts, deposits or other obligations of a bank and are not insured by the FDIC or any other governmental agency or instrumentality of the
United States, the United Kingdom or any other jurisdiction.

Proceeds
Underwriting
(before expenses)

Price to Public

Discount

to issuer

Per note

99.939%

0.200%

99.739%

Total

$1,249,237,500

$2,500,000

$1,246,737,500

Interest on the notes will accrue from the date of issuance, which is expected to be January 13, 2020.
We may use this prospectus supplement and the accompanying prospectus in the initial sale of the notes. In addition, Santander Investment Securities Inc. or another of our affiliates
may use this prospectus supplement and the accompanying prospectus in a market-making transaction in any of these notes after their initial sale. In connection with any use of this prospectus
supplement and the accompanying prospectus by Santander Investment Securities Inc. or another of our affiliates, unless we or our agent informs the purchaser otherwise in the confirmation of
sale, you may assume this prospectus supplement and the accompanying prospectus are being used in a market-making transaction.
The underwriters expect to deliver the notes to purchasers in book-entry form only through the facilities of The Depository Trust Company, or "DTC," for the accounts of its
participants, including Clearstream Banking, société anonyme, or "Clearstream," and Euroclear Bank S.A./N.V., or "Euroclear," on or about January 13, 2020.
Joint Book-Running Managers
Barclays

Citigroup
Morgan Stanley
NatWest Markets
Santander
January 6, 2020
Table of Contents
TABLE OF CONTENTS

Page

Prospectus Supplement

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
S-1

SUMMARY
S-2

RISK FACTORS
S-6

USE OF PROCEEDS
S-8

CAPITALIZATION
S-9

DESCRIPTION OF THE NOTES
S-12

TAX CONSIDERATIONS
S-14

UNDERWRITING (CONFLICTS OF INTEREST)
S-15

VALIDITY OF NOTES
S-21

EXPERTS
S-21
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Base Prospectus

ABOUT THIS PROSPECTUS

4

LIMITATIONS ON ENFORCEMENT OF U.S. LAWS

4

WHERE YOU CAN OBTAIN MORE INFORMATION

5

FORWARD-LOOKING STATEMENTS MAY NOT BE ACCURATE

6

DESCRIPTION OF THE ISSUER

9

RISK FACTORS

11

USE OF PROCEEDS

15

DESCRIPTION OF THE DEBT SECURITIES

16

CERTAIN TAX CONSIDERATIONS

30

PLAN OF DISTRIBUTION (CONFLICTS OF INTEREST)

37

LEGAL OPINIONS

40

EXPERTS

40
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MiFID II product governance / Professional investors and ECPs only target market
Solely for the purposes of each manufacturer's product approval process, the target market assessment in respect of the notes has led to the
conclusion that: (i) the target market for the notes is eligible counterparties and professional clients only, each as defined in Directive 2014/65/EU (as
amended, "MiFID II"); and (ii) all channels for distribution of the notes to eligible counterparties and professional clients are appropriate. Any person
subsequently offering, selling or recommending the notes (a "distributor") should take into consideration the manufacturers' target market assessment;
however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the notes (by either adopting or
refining the manufacturers' target market assessment) and determining appropriate distribution channels.
PRIIPs Regulation / Prohibition of sales to EEA retail investors
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 (the "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 MiFID II; or (ii) a customer within the meaning of Directive (EU) 2016/97 (the "Insurance Distribution
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 (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.
We are responsible for the information contained and incorporated by reference in this prospectus supplement and the accompanying prospectus
and in any related free-writing prospectus we prepare or authorize. We have not, and the underwriters have not, authorized anyone to give you any other
information, and we and the underwriters take no responsibility for any other information that others may give you. This prospectus supplement and the
accompanying prospectus do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the notes to which they relate or
an offer to sell or the solicitation of an offer to buy such notes by any person in any circumstances in which such offer or solicitation is unlawful.
Neither the delivery of this prospectus supplement and the accompanying prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that there has been no change in our affairs since the date of this prospectus supplement or that the information contained in this
prospectus supplement and the accompanying prospectus is correct as of any time subsequent to its date.
The distribution or possession of this prospectus supplement and the accompanying prospectus in or from certain jurisdictions may be restricted by
law. You should inform yourself about and observe any such restrictions, and neither we nor any of the underwriters accepts any liability in relation to
any such restrictions. See "Underwriting."
Notice to Canadian Investors
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This prospectus supplement and the accompanying prospectus constitute an "exempt offering document" as defined in and for the purposes of
applicable Canadian securities laws. No prospectus has been filed with any securities commission or similar regulatory authority in Canada in
connection with the offer and sale of the notes. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed
upon this prospectus supplement and the accompanying prospectus or on the merits of the notes and any representation to the contrary is an offence.
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Certain Relationships and Related Transactions
We are relying on an exemption based on U.S. disclosure under section 3A.3 of National Instrument 33-105 Underwriting Conflicts from the
requirement to provide disclosure with respect to "related issuer" or "connected issuer" relationships. Canadian investors should refer to the section
entitled "--Conflicts of Interest" for further information.
Rights of Action for Damages or Rescission
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if an offering
memorandum such as this prospectus supplement and the accompanying prospectus (including any amendment thereto) contains a misrepresentation,
provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the
purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or
territory for particulars of these rights or consult with a legal advisor.
Language of Documents
Upon receipt of this document, each Canadian investor hereby confirms that it has expressly requested that all documents evidencing or relating in
any way to the sale of the securities described herein (including for greater certainty any purchase confirmation or any notice) be drawn up in the
English language only. Par la réception de ce document, chaque investisseur canadien confirme par les présentes qu'il a expressément exigé que tous
les documents faisant foi ou se rapportant de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus
de certitude, toute confirmation d'achat ou tout avis) soient rédigés en anglais seulement.
Bank Act (Canada)
The issuer is not a member institution of the Canada Deposit Insurance Corporation. The liability incurred by the issuer through the issuance and
sale of the notes is not a deposit. The issuer is not regulated as a financial institution in Canada.
Resale Restrictions
The distribution of the notes in Canada is being made on a private placement basis only and is exempt from the requirement that we prepare and
file a prospectus with the relevant Canadian securities regulatory authorities. Accordingly, any resale of the notes acquired by a Canadian investor in
this offering must be made in accordance with applicable Canadian securities laws, which may require resales to be made in accordance with
prospectus and registration requirements, statutory exemptions from the prospectus and registration requirements or under a discretionary exemption
from the prospectus and registration requirements granted by the applicable Canadian securities regulatory authority. These resale restrictions may
under certain circumstances apply to resales of the notes outside of Canada. Canadian investors are advised to seek legal advice prior to any resale of
the notes, both within and outside of Canada.
We are not presently, and do not intend to become, a "reporting issuer", as such term is defined under applicable Canadian securities laws, in any
province or territory of Canada. Canadian investors are advised that the notes are not and will not be listed on any stock exchange in Canada and that no
public market presently exists or is expected to exist for the notes in Canada following this offering. Canadian investors are further advised that the
issuer is not required to file, and currently does not intend to file, a prospectus or similar document with any securities regulatory authority in Canada
qualifying the resale of the notes to the public in any province or territory of Canada in connection with this offering. Accordingly, the notes may be
subject to an indefinite hold period under applicable
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Canadian securities laws unless resales are made in accordance with applicable prospectus requirements or pursuant to an available exemption from
such prospectus requirements.
Forward-Looking Information
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This prospectus supplement and the accompanying prospectus may contain "forward-looking information" ("FLI") as such term is defined under
applicable Canadian securities laws. FLI is disclosure regarding possible events, conditions or results of operations that is based on assumptions about
future economic conditions and courses of action and includes future-oriented financial information ("FOFI") and information presented in the form of a
"financial outlook" with respect to prospective results of operations, financial position or cash flows that is presented either as a forecast or a projection.
FOFI is FLI about prospective results of operations, financial position or cash flows, based on assumptions about future economic conditions and
courses of action, and presented in the format of a historical balance sheet, income statement or cash flow statement. Similarly, a "financial outlook" is
FLI about prospective results of operations, financial position or cash flows that is based on assumptions about future economic conditions and courses
of action that is not presented in the format of a historical balance sheet, income statement or cash flow statement.
Canadian investors are advised that FLI is subject to a variety of risks, uncertainties and other factors that could cause actual results to differ
materially from expectations as expressed or implied within this prospectus supplement and the accompanying prospectus. FLI reflects current
expectations with respect to future events and is not a guarantee of future performance. Any FLI that may be included or incorporated by reference
within this prospectus supplement and the accompanying prospectus, including any FOFI or "financial outlook", is presented solely for the purpose of
conveying our current anticipated expectations and may not be appropriate for any other purposes. Canadian investors are cautioned not to place undue
reliance on any FLI that may be included or incorporated by reference within this prospectus supplement and the accompanying prospectus and are
advised that we are not obligated to provide recipients of this prospectus supplement and the accompanying prospectus with information updating any
such FLI during any period that we are not a "reporting issuer" in any province or territory of Canada, other than as may be required under applicable
securities laws and/or as agreed to in contract. This offering is being made by a non-Canadian issuer using disclosure documents prepared in
accordance with non-Canadian securities laws. Prospective purchasers should be aware that these requirements may differ significantly from those in
Canada. Any FLI included or incorporated by reference within this prospectus supplement and accompanying prospectus may not be accompanied by
the disclosure and explanations that would be required of a Canadian issuer under Canadian securities laws.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We file reports and other information with the Commission. The Commission allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus supplement and the accompanying prospectus. Certain later information that we file with the Commission will
automatically update and supersede this information and any information so updated and superseded shall not be deemed, except as so updated or
superseded, to constitute part of the registration statement or this prospectus supplement. We incorporate by reference the following documents:
·
our annual report on Form 20-F for the year ended December 31, 2018 filed with the Commission on March 11, 2019 (SEC File
No. 001-14928) (the "Annual Report on Form 20-F"),
·
our report on Form 6-K furnished on April 30, 2019 (SEC File No. 001-14928),
·
our report on Form 6-K furnished on May 7, 2019 (SEC File No. 001-14928),
·
our report on Form 6-K furnished on July 10, 2019 (SEC File No. 001-14928),
·
our report on Form 6-K furnished on July 24, 2019 (SEC File No. 001-14928),
·
our report on Form 6-K furnished on August 16, 2019 (SEC File No. 001-14928) (the "Half Year Report 2019 on Form 6-K"),
·
our report on Form 6-K furnished on August 16, 2019 (SEC File No. 001-14928),
·
our report on Form 6-K furnished on November 1, 2019 (SEC File No. 001-14928),
·
our report on Form 6-K furnished on December 17, 2019 (SEC File No. 001-14928),
·
any future filings on Form 20-F made with the Commission under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), after the date of this prospectus supplement and prior to the termination of the offering of the securities offered by this prospectus
supplement, and
·
any future reports on Form 6-K that we furnish to the Commission after the date of this prospectus supplement and prior to the
termination of the offering of securities offered by this prospectus supplement that are identified in such reports as being incorporated by
reference in this prospectus supplement but only to the extent identified in such reports.
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Our filings with the Commission are available at http://sec.gov. In addition, you may request a copy of these documents at no cost to you, by
writing to or telephoning us at the following address: Secretariat, Santander UK plc, 2 Triton Square, Regent's Place, London NW1 3AN, England,
telephone: +44 870 607 6000. Website: http://www.santander.co.uk/uk/about-santander-uk/investor-relations. The information on, or that can be
accessed through, our website is not part of this prospectus supplement or the accompanying prospectus.
S-1
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SUMMARY
This summary highlights selected information from this prospectus supplement, the accompanying prospectus and the documents incorporated by
reference and does not contain all of the information that may be important to you. You should carefully read this entire prospectus supplement, the
accompanying prospectus and the documents incorporated by reference. As used in this prospectus supplement, the terms "we," "our" and "us" refer to
Santander UK plc and its consolidated subsidiaries unless the context requires otherwise.
The Offering
Notes
$1,250,000,000 principal amount of notes.
Issuer
Santander UK plc.
Maturity date
The notes will mature on January 13, 2023.
Interest rate
The notes will bear interest at a rate of 2.100% per year.
Interest payment dates
Each January 13 and July 13, and on the maturity date of the notes, commencing July 13, 2020. If an interest
payment date or redemption date, or the maturity date, as the case may be, for the notes would fall on a
Saturday, Sunday, a legal holiday or a day on which banking institutions in the City of New York or
London, England are authorized or required by law, regulation or executive order to close, then the interest
payment date, redemption date or maturity date, as the case may be, will be postponed to the next
succeeding business day, but no additional interest shall accrue and be paid unless we fail to make payment
on such next succeeding business day.
Regular record dates for interest
The fifteenth calendar day (whether or not a business day) preceding the related interest payment date.
Calculation of interest
Interest on the notes will be calculated on the basis of a 360-day year consisting of twelve 30-day months.
CUSIP / ISIN
80283L AY9/US80283LAY92
Denominations
The notes will be issued only in book-entry form, in minimum denominations of $200,000 and integral
multiples of $1,000 in excess thereof.
Ranking
The notes will constitute our direct, unconditional, unsecured and unsubordinated obligations ranking pari
passu and without preference among themselves, and will rank (subject to any applicable statutory
provisions) at least equally with all our other outstanding unsecured and unsubordinated obligations, present
and future.
S-2
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Payment of
Subject to certain exceptions, if we are required to withhold or deduct any amount for or on account of any U.K. withholding tax
additional
from any payment made on the notes, we will pay additional amounts on those payments so that the amount received by holders of
amounts
the notes will equal the amount that would have been received if no such taxes had been applicable. See "Description of the Debt
Securities--Additional Amounts" and "Description of the Debt Securities--Covenants" in the accompanying prospectus.
Tax redemption In the event of various tax law changes that require us to pay additional amounts and other limited circumstances as described under
"Description of the Debt Securities--Redemption" in the accompanying prospectus we may redeem all but not some of the notes
prior to maturity at a redemption price equal to 100% of their principal amount plus accrued interest, if any, to, but excluding, the
redemption date.
Repayment
The notes will not be subject to repayment at the option of the holder prior to maturity.
Agreement with By its acquisition of the notes, each holder of notes (including each holder of a beneficial interest in the notes) acknowledges,
respect to the
accepts, agrees to be bound by and consents to the exercise of the UK bail-in power by the relevant UK resolution authority. See
exercise of UK
"Description of the Notes--Agreement with Respect to the Exercise of UK Bail-in Power" and "Description of the Debt Securities--
bail-in power
Agreement with Respect to the Exercise of UK Bail-in Power" in the accompanying prospectus.
Repayment of

Amounts Due
after exercise of
No Amounts Due on the notes will become due and payable or be paid after the exercise of any UK bail-in power by the relevant UK
UK bail-in
resolution authority if and to the extent such Amounts Due have been reduced, converted, cancelled, amended or altered as a result of
power
such exercise.
Sinking fund
None.
Book-entry

issuance,
We will issue the notes as global notes in book-entry form registered in the name of DTC or its nominee. The sale of the notes will
settlement and
settle in immediately available funds through DTC. Investors may hold interests in a global note through organizations that
clearance
participate, directly or indirectly, in the DTC system. Those organizations will include Clearstream and Euroclear in Europe.
Governing law The notes and the indenture will be governed by the laws of the State of New York.
S-3
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Conflicts of interest
Santander Investment Securities Inc. is an affiliate of the issuer and, as such, the offering is being conducted
in compliance with Rule 5121 of the Financial Industry Regulatory Authority ("FINRA") addressing
"conflicts of interest" as defined in that rule. See "Underwriting--Conflicts of Interest" in this prospectus
supplement.
Further issuances
We may, without the consent of the holders of the notes, issue additional notes having the same ranking and
same interest rate, maturity date, redemption terms and other terms as the notes described in this prospectus
supplement except for the price to the public and issue date; provided however that such additional notes
shall be issued under a separate CUSIP, Common Code and/or ISIN number unless the additional notes are
issued pursuant to a "qualified reopening" of the notes offered by this prospectus supplement, are otherwise
treated as part of the same "issue" of debt instruments as the notes offered by this prospectus supplement, or
the additional notes are issued with no more than a de minimis amount of original issue discount, in each
case for U.S. federal income tax purposes. See "Description of the Notes--Further Issuances" in this
prospectus supplement.
Listing
We intend to apply to list the notes on the New York Stock Exchange or another recognized securities
exchange; however, there can be no assurance that the notes will be so listed by the time the notes are
delivered to purchasers or that the listing will be granted.
Use of proceeds
We intend to use the net proceeds from the sale of the notes for our general corporate purposes.
Paying agent and trustee
Wells Fargo Bank, National Association.
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Recent Developments
Certain financial information for the nine months ended September 30, 2019
On November 1, 2019, we released certain financial information for the nine months ended September 30, 2019, which was furnished to the SEC
on a Form 6-K dated November 1, 2019 and which is incorporated by reference herein. The following is a summary of certain financial information for
the nine months ended September 30, 2019, compared to the comparable period in 2018.
·
Net interest income decreased, largely impacted by mortgage back book pressure and SVR attrition.
·
Non-interest income decreased, largely due to ring-fencing perimeter changes and short-term markets activity now reported in net
interest income. This was partially offset by an increase in consumer (auto) finance income.
·
Operating expenses before credit impairment losses, provisions and charges decreased, with the absence of ring-fencing perimeter
changes and Banking Reform costs incurred in the nine months ended September 30, 2018.
·
Credit impairment losses increased, predominantly due to lower mortgage releases this year. These were partially offset by a
securitisation release in the second quarter of 2019.
S-4
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·
Provisions for other liabilities and charges increased, due to an increase in PPI provision and transformation program charges
(predominantly restructuring costs).
·
Profit before tax decreased, compared to the nine months ended September 30, 2018, as outlined above.
·
Tax on profit decreased, as a result of lower taxable profits during the period, partially offset by additional PPI remediation charges
which are not tax deductible.
S-5
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RISK FACTORS
The Annual Report on Form 20-F and the Half Year Report on Form 6-K, each of which is incorporated by reference in this prospectus supplement
and the accompanying prospectus includes, beginning on page 222 of the Annual Report on Form 20-F and beginning on page 56 of the Half Year
Report on Form 6-K, extensive risk factors relating to our business. You should carefully consider those risks and the risks relating to the notes
described below and in the accompanying prospectus beginning on page 11, as well as the other information included or incorporated by reference into
this prospectus supplement and the accompanying prospectus, before making a decision to invest in the notes.
Exposure to U.K. political developments, including the ongoing negotiations between the U.K. and EU, could have a material adverse effect on our
business, operating results, financial condition and prospects
On June 23, 2016, the UK held a referendum on EU membership in which the majority voted in favor of leaving the EU. Following two previous
extensions of the originally scheduled exit date, the EU has agreed to a further extension until January 31, 2020, unless the UK and the EU are able to
ratify a withdrawal agreement prior to that date. If the UK and EU ratify the withdrawal agreement by January 31, 2020, a transition period has been
agreed which will last until December 31, 2020. During this period, most EU rules and regulations will continue to apply to the UK and negotiations in
relation to a free trade agreement will commence. The transition period may be extended once by up to two years. While continuing to discuss the
Article 50 withdrawal agreement and political declaration, the UK Government has commenced preparations for a "hard" Brexit (or "no-deal" Brexit) to
minimize the risks for firms and businesses associated with an exit with no transitional period. This has included publishing draft secondary legislation
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under powers provided in the European Union (Withdrawal) Act 2018 to ensure that there is a functioning statute book after any exit with a transitional
agreement. There remains a great deal of uncertainty about the UK's exit and its future relationship with the European Union and with regard to the
UK's future trading relationship with the rest of the world.
The outcome of Brexit remains uncertain; however, the UK's exit from the European Union without an agreement remains a possibility and the
consensus position is that it would have a negative impact on the UK economy and its growth prospects. While it is difficult to predict the long-term
effects of the UK's imminent exit from the European Union, in the short term the situation is one of economic and political uncertainty.
We are subject to significant regulation and supervision by the European Union. Although legislation has already been passed transferring EU
standards to UK standards, uncertainty persists as to the legal and regulatory environments in which we and other subsidiaries of Santander UK Group
Holdings plc will operate in the UK when that country is no longer a member of the European Union, and the framework in which cross-border banking
business will take place after Brexit.
At the operational level, we, Santander UK Group Holdings plc's UK subsidiaries and other financial institutions may no longer be able to rely on
the European cross-border framework for financial services and it is not clear what the alternative regime after Brexit will be. This uncertainty and the
measures taken as a result of it, as well as the new or amended rules could have a significant impact on our operations, profitability and business.
These UK political developments, together with other changes in the structure and policies of government, could lead to greater market volatility
and changes in the tax, monetary and regulatory landscape in which we operate and could have material adverse effects on our access to capital and
liquidity under acceptable conditions and, more generally, on our business, financial position and operating results.
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We are subject to regulatory capital and leverage requirements that could limit our operations, and changes to these requirements may further limit
and adversely affect our operations, financial condition and prospects
Please refer to the risk factor "We are subject to regulatory capital and leverage requirements that could limit our operations, and changes to these
requirements may further limit and adversely affect our operations, financial condition and prospects" on pages 231-232 of the Annual Report on
Form 20-F. On November 26, 2016, the European Commission published legislative proposals for amendments to the Capital Requirements Directive
IV ("CRD IV"), the Single Resolution Mechanism Regulation ("SRM Regulation") and the EU Bank Recovery and Resolution Directive ("BRRD")
(together, the "CRD V Package"). The European Parliament adopted the final texts of the CRD V Package on April 16, 2019, which were subsequently
adopted by the Council of the European Union on May 14, 2019. The CRD V Package entered into force on June 27, 2019. The amendments to the
CRD IV Regulation will apply from June 28, 2021 (with some exceptions). EU Member States will be expected to adopt and publish the measures
necessary to comply with the amendments to the CRD IV Directive by December 28, 2020, and to apply these measures from December 29, 2020 (with
some exceptions). EU Member States are expected to adopt and publish the measures necessary to comply with the amendments to the BRRD by
December 28, 2020, and to apply these measures from the same date (with some exceptions). The Financial Services (Implementation of Legislation)
Bill, which received its first reading in the House of Lords in November 2018, would, subject to the detailed provisions set out in the Bill, permit HM
Treasury to implement the CRD V Package by way of regulations, with any adjustments that HM Treasury considers appropriate. The Bill was due to
have its report stage and third reading on March 4, 2019, but this was postponed. The Bill has made no further progress and will have to be reintroduced
from scratch, as it failed to complete its passage through Parliament in the last parliamentary season. As a result, the potential impact on us of the CRD
V Package is currently uncertain. These requirements could materially increase our cost of doing business, including that we may have to issue
increased debt to meet the requirements. The amendments to the SRM Regulation will apply from December 28, 2020.
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USE OF PROCEEDS
We estimate the net proceeds from the sale of the notes to be approximately $1,246,201,034 after deducting the underwriting discount and
expenses of the offering. We intend to use the net proceeds for general corporate purposes.
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CAPITALIZATION
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The following table sets forth Santander UK plc's unaudited consolidated capitalization (including short-term debt) as of June 30, 2019, on an
actual basis and on an as adjusted basis to give effect to the sale of the notes.
As of

June 30, 2019

Actual

As Adjusted

£m

£m(1)

Indebtedness:

Debt securities in issue
44,574
45,634
Subordinated liabilities

3,645
3,645
?
?
?
?
?
?
?
?
Total indebtedness
48,219
49,279
?
?
?
?
?
?
?
?
Stockholders' equity

Share capital and other equity instruments

5,096
5,096
Share premium account

5,620
5,620
Retained earnings

4,658
4,658
Other reserves

531
531
?
?
?
?
?
?
?
?
Total equity
15,905
15,905
?
?
?
?
?
?
?
?
Non-controlling interest

159
159
?
?
?
?
?
?
?
?
Total capitalization
64,283
65,343
?
?
?
?
?
?
?
?
?
?
?
? ?
?
? ?
?
?
?
?
?
?
?
?
(1)
Adjusted to give effect to the net proceeds from the sale of the notes. The gross proceeds of the notes of $1,249,237,500
have been translated into pounds sterling at an exchange rate of $1.1760 as of January 6, 2020. Additionally, fees and
expenses of $3,036,466 have been deducted.
Under IFRS, our £325 million sterling preference shares are classified as debt and are included, together with accrued interest, in subordinated
liabilities in the table above.
As of June 30, 2019, we had total liabilities and equity of £284,527 million, including deposits by banks of £16,489 million.
On June 24, 2014, December 2, 2014, June 10, 2015 and April 10, 2017, we issued £500 million, £300 million, £750 million and £500 million
respectively, of Perpetual Capital Securities to our immediate parent company, Santander UK Group Holdings plc, which are reflected in share capital
and other equity instruments in the table above.
On September 20, 2018 and October 30, 2018, as part of a capital management exercise, we purchased and redeemed £40 million and £250 million
respectively of the £500 million Perpetual Capital Securities issued on June 24, 2014.
As of June 30, 2019, we had contingent liabilities including guarantees arising in the normal course of business totaling £42,906 million, consisting
of guarantees given to third parties of £1,055 million, formal standby facilities, credit lines and other commitments of £41,851 million.
The debt securities in issue listed in the above table exclude retained issuances (notes held by Santander UK plc). They include:
a)
£2,283 million of medium term notes issued by Holmes Master Issuer plc under its Residential Mortgage-Backed Securities Program and
£200 million of medium term notes issued by Fosse Master Issuer plc under its Residential Mortgage-Backed Securities Program (the
"Holmes
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and Fosse notes"). The Holmes and Fosse notes are ultimately secured, under the respective Program, on a share of residential mortgages
originated by Santander UK plc (and, in the case of Fosse, also originated by Alliance & Leicester plc). Under IFRS, indebtedness under
the Holmes and Fosse notes is required to be included within our indebtedness in the table above, notwithstanding that neither we nor
any of our subsidiaries is required to support such indebtedness.
b)
£505 million of medium term notes issued by Motor 2016-1 plc and Motor 2017-1 plc (together, the "Motor notes"). The Motor notes are
ultimately secured on two corresponding portfolios of auto loan receivables (for Motor 2016-1 plc and Motor 2017-1 plc respectively)
originated by Santander Consumer (UK) plc. Under IFRS, indebtedness under the Motor notes is required to be included within our
indebtedness in the table above, notwithstanding that neither we nor any of our subsidiaries is required to support such indebtedness.
c) £1,103 million of auto loans asset-backed securities.
d)
£19,926 million of covered bonds issued under the 35 billion Global Covered Bond Program (the "Covered Bond program") by
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