| Issuer: | Sovereign Bancorp, Inc. | |
| Securities: | Depositary shares each representing a 1/1,000th ownership interest in a share of Series C Non-Cumulative Perpetual Preferred Stock | |
| Legal Format: | SEC Registered (File No. 333-133514) | |
| Size: | $200,000,000 | |
| Ratings: | Moody’s: Ba2; S&P: BB | |
| Number of Depositary Shares: | 8,000,000 depositary shares | |
| Maturity: | Perpetual | |
| Liquidation Preference: | $25,000 per preferred share (equivalent to $25 per depositary share) | |
| Public Offering Price: | $25 per depositary share | |
| Dividend Rate (non-cumulative): | 7.300% per year on the amount of liquidation preference | |
| Day Count Convention: | 30/360 | |
| Underwriting Compensation: | $0.7875 per depositary share, except for sales to certain institutions in respect of which the underwriting compensation will be $0.50 per depositary share. | |
| Net Proceeds to the Company (before expenses): | $193,700,000 (assuming an underwriting compensation of $0.7875 per depositary share on all sales) | |
| Settlement Date (T+3): | May 1, 2006 | |
| Dividend Payment Dates: | February 15, May 15, August 15, and November 15, commencing August 15, 2006 |
| Redemption Provisions: | The Series C Preferred Stock is not redeemable prior to May 15, 2011. On and after that date, the Series C Preferred Stock will be redeemable at the issuer’s option, subject to the prior approval of the Office of Thrift Supervision (or any successor bank regulatory agency having jurisdiction over the issuer), in whole at any time or in part from time to time, at a redemption price equal to $25,000 per share (equivalent to $25 per depositary share), plus any declared and unpaid dividends, without accumulation of any undeclared dividends. Neither the holders of Series C Preferred Stock nor holders of depositary shares will have the right to require the redemption or repurchase of the Series C Preferred Stock. | |
| Voting Rights: | None, except, as discussed in more detail in the prospectus supplement under “Description of Series C Preferred Stock — Voting Rights,” in the case of certain dividend non-payments and to approve certain transactions. Holders of depositary shares must act through the depositary to exercise any voting rights, as discussed in more detail in the prospectus supplement under “Description of Depositary Shares — Voting the Series C Preferred Stock.” | |
| Tax Consequences: | As discussed in more detail in the prospectus supplement under “Certain U.S. Federal Income Tax Considerations,” distributions constituting dividend income received by an individual U.S. holder in respect of the depositary shares before January 1, 2009 will generally represent ''qualified dividend income,” which will be subject to taxation at a maximum rate of 15% (or a lower rate for individuals in certain tax brackets) subject to certain exceptions for short-term and hedged positions. In addition, subject to similar exceptions for short-term and hedged positions, distributions on the depositary shares constituting dividend income paid to holders that are U.S. corporations will generally qualify for the 70% dividends-received deduction. | |
| Perpetual Preferred Series C CUSIP: | 845905504 | |
| Perpetual Preferred Series C ISIN: | US8459055047 | |
| Depositary Shares CUSIP: | 845905405 | |
| Depositary Shares ISIN: | US8459054057 |
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| Listing: | Application will be made to list the depositary shares on the New York Stock Exchange. | |
| Joint Book-Running Managers: | Citigroup Bear, Stearns & Co. Inc. JPMorgan | |
| Co-Managers: | Lehman Brothers Morgan Stanley Santander Investment |
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