Capital/Financing Update • Jan 14, 2025
Capital/Financing Update
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13 January 2025
Nationwide Building Society
UK MIFIR PRODUCT GOVERNANCE/TARGET MARKET – Solely for the purposes of the manufacturers' product approval process, the target market assessment in respect of the Covered Bonds has led to the conclusion that: (i) the target market for the Covered Bonds is eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook (COBS), and professional clients, as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA (UK MiFIR); and (ii) all channels for distribution of the Covered Bonds to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the Covered Bonds (a distributor) should take into consideration the manufacturers' target market assessment; however, a distributor subject to the FCA Handbook Product Intervention and Product Governance Sourcebook (the UK MiFIR Product Governance Rules) is responsible for undertaking its own target market assessment in respect of the Covered Bonds (by either adopting or refining the manufacturers' target market assessment) and determining appropriate distribution channels.
PROHIBITION OF SALES TO EEA RETAIL INVESTORS – The Covered Bonds 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 both) 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or (ii) a customer within the meaning of Directive (EU) 2016/97 (the Insurance Distribution Directive) as amended or superseded, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II.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 Covered Bonds or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Covered Bonds or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
PROHIBITION OF SALES TO UK RETAIL INVESTORS – The Covered Bonds 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 UK. For these purposes, a retail investor means a person who is one (or both) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended by the European Union (Withdrawal Agreement) Act 2020) as amended, varied, superseded or substituted from time to time (EUWA); (ii) a customer within the meaning of the provisions of the FSMA and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA. Consequently, no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA (the UK PRIIPs Regulation) for offering or selling the Covered Bonds or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the Covered Bonds or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.
Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth in the Base Prospectus dated 21 June 2024 and the supplemental Prospectus dated 11 December 2024, which constitute a base prospectus for the purposes of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA (the UK Prospectus Regulation). This document constitutes the Final Terms of the Covered Bonds described herein for the purposes of the UK Prospectus Regulation and must be read in conjunction with such Base Prospectus in order to obtain all the relevant information. The Base Prospectus and the supplemental Prospectus are available for viewing during normal business hours at the registered office of the Issuer and copies may be obtained from the specified office of each of the Paying Agents and have been published on the Regulatory News Service operated by the London Stock Exchange at http://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
The LLP is not now, and immediately following the issuance of the Covered Bonds pursuant to the Trust Deed will not be, a "covered fund" for purposes of regulations adopted under Section 13 of the Bank Holding Company Act of 1956, as amended, commonly known as the "Volcker Rule". In reaching this conclusion, although other statutory or regulatory exemptions under the Investment Company Act of 1940, as amended, and under the Volcker Rule and its related regulations may be available, the LLP has relied on the exemption from registration set forth in Section 3(c)(5)(C) of the Investment Company Act of 1940, as amended. See "Certain Volcker Rule Considerations" in the Prospectus dated 21 June 2024.
| 1. | (a) | Issuer: | Nationwide Building Society | ||
|---|---|---|---|---|---|
| (b) | Guarantor: | Nationwide Covered Bonds LLP | |||
| 2. | (a) | Series Number: | 2025-01 | ||
| (b) | Tranche Number: | 1 | |||
| (c) | Series which Covered Bonds will be consolidated and form a single Series with: |
Not Applicable | |||
| (d) | Date on which the Covered Bonds will be consolidated and form a single Series with the Series specified above: |
Not Applicable | |||
| 3. | Specified Currency or Currencies: | Pounds Sterling (GBP or £) | |||
| 4. | Nominal Amount of Covered Bonds to be issued: | £1,000,000,000 | |||
| 5. | Aggregate Nominal Amount of Covered Bonds: | ||||
| (a) | Series: | £1,000,000,000 | |||
| (b) | Tranche: | £1,000,000,000 | |||
| 6. | Issue Price: | 100% of the Aggregate Nominal Amount | |||
| 7. | (a) | Specified Denominations: | £100,000 and integral multiples of £1,000 in excess thereof up to and including £199,000. No Covered Bonds in definitive form will be issued with a denomination above £199,000. |
||
| (b) | Calculation Amount: | £1,000 | |||
| 8. | (a) | Issue Date: | 14 January 2025 |
| (b) | Interest Commencement Date: | Issue Date | |
|---|---|---|---|
| 9. | (a) | Final Maturity Date: | Specified Interest Payment Date falling on or nearest to 14 January 2030 |
| (b) | Extended Due for Payment Date of Guaranteed Amounts corresponding to the Final Redemption Amount under the Covered Bond Guarantee: |
Specified Interest Payment Date falling on or nearest to 14 January 2031 |
|
| 10. | Interest Basis: | Compounded Daily SONIA +0.55% Floating Rate | |
| (further particulars specified below) | |||
| 11. | Redemption/Payment Basis: | 100% of the nominal value | |
| 12. | Change of Interest Basis: | Applicable for the period from and including the Final Maturity Date to but excluding the Extended Due for Payment Date as follows: |
|
| Interest Period(s): The period from and including the Final Maturity Date or, as the case may be, a Specified Interest Payment Date, to but excluding the following Specified Interest Payment Date |
|||
| Specified Interest Payment Date(s): 14 February 2030 and thereafter, the 14th day of each month up to and including the Extended Due for Payment Date or any other date on which the Covered Bonds are redeemed in full |
|||
| First Interest Payment Date: The Specified Interest Payment Date falling on or nearest to 14 February 2030 |
|||
| Save as set out above, the Floating Rate Covered Bond Provisions specified in item 16 shall apply from the Interest Commencement Date to but excluding the Final Maturity Date. |
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| 13. | Call Options: | Not Applicable | |
| 14. | Date Board approval for issuance of Covered Bonds obtained: |
19 June 2024 and 10 January 2025, for the Issuer and the LLP, respectively |
| 15. | Fixed Rate Covered Bond Provisions: | Not Applicable | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 16. | Floating Rate Covered Bond Provisions: | Applicable | |||||||
| (a) | Interest Period(s): | The | period | from | and | including Commencement Date or, as the case may be, a Specified |
the | Interest | |
| Interest Payment Date, to but excluding the following Specified Interest Payment Date |
|||
|---|---|---|---|
| (b) | Specified Interest Payment Date(s): | Quarterly on the 14th day of January, April, July and October in each year from and including 14 April 2025 to and including the Final Maturity Date or any other date on which the Covered Bonds are redeemed in full |
|
| (c) | First Interest Payment Date: | The Specified Interest Payment Date falling on or nearest to 14 April 2025 |
|
| (d) | Business Day Convention: | Modified Following Business Day Convention | |
| (e) | Business Centre(s): | London | |
| (f) | Manner in which the Rate(s) of Interest is/are to be determined: |
Screen Rate Determination | |
| (g) | Party responsible for calculating the Rate(s) of Interest and/or Interest Amount (if not the Agent): |
Not Applicable | |
| (h) | Screen Rate Determination: | Applicable | |
| Reference Rate: |
Compounded Daily SONIA | ||
| Interest Determination Date(s): |
Five London Banking Days prior to the end of each Interest Period |
||
| Term Rate: |
Not Applicable | ||
| Overnight Rate: |
Applicable | ||
| Index Determination |
Applicable (in accordance with the formula under paragraph (iii) in the definition of Compounded Daily SONIA under the section Compounded Daily SONIA (Index Determination) in Condition 4.2(b)(ii)) |
||
| Relevant Number: |
5 London Banking Days | ||
| Observation Method: |
Not Applicable | ||
| Lock-Out Date: |
Not Applicable | ||
| Relevant Screen Page: |
Bloomberg Screen Page SONCINDX | ||
| (i) | ISDA Determination: | Not Applicable | |
| (j) | Margin(s): | +0.55% per annum | |
| (k) | Minimum Rate of Interest: | 0.00% per annum | |
| (l) | Maximum Rate of Interest: | Not Applicable | |
| (m) | Day Count Fraction: | Actual/365 (Fixed) | |
| 17. | Zero Coupon Covered Bond Provisions: | Not Applicable | |
| 18. | Bond: | Final Redemption Amount of each Covered | £1,000 per Calculation Amount |
| 20. | Form of Covered Bonds: | Bearer Covered Bonds: | ||
|---|---|---|---|---|
| Temporary Global Covered Bond exchangeable for a Permanent Global Covered Bond which is exchangeable for Bearer Definitive Covered Bonds in definitive form only after an Exchange Event |
||||
| 21. | New Global Covered Bond: | Yes | ||
| 22. | Financial Centre(s) relating to payment dates: | Not Applicable | ||
| 23. | Talons for future Coupons to be attached to Bearer Definitive Covered Bonds (and dates on which such Talons mature): |
No | ||
| 24. | Redenomination, renominalisation and reconventioning provisions: |
Not Applicable |
| (a) | Admission to trading: | Application has been made by the Issuer (or on its behalf) for the Covered Bonds to be admitted to trading on the London Stock Exchange's main market and to be listed on the Official List of the FCA with effect from the Issue Date |
|---|---|---|
| (b) | Estimate of total expenses related to admission to trading: |
£6,500 |
The Covered Bonds to be issued are expected to be rated:
S&P: AAA (endorsed by S&P Global Ratings Europe Limited)
Fitch: AAA (endorsed by Fitch Ratings Ireland Limited)
Fitch Ratings Limited and S&P Global Ratings UK Ltd. are established in the UK and are registered in accordance with Regulation (EC) No. 1060/2009 as it forms part of domestic law by virtue of the EUWA (the UK CRA Regulation).
Fitch Ratings Limited (endorsed by Fitch Ratings Ireland Limited) has, in its 11 June 2024 publication "Ratings Definitions", described a credit rating of 'AAA in the following terms: "AAA' ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events".
S&P Global Ratings UK Ltd. (endorsed by S&P Global Ratings Europe Limited) has, in its 15 October 2024 publication "S&P Global Ratings Definitions", described a credit rating of 'AAA in the following terms: "An obligation rated 'AAA' has the highest rating assigned by S&P Global Ratings. The obligor's capacity to meet its financial commitments on the obligation is extremely strong."
| (a) | BMR Spread: | 1.8% per annum |
|---|---|---|
| (b) | Fixed Rate Spread: | 1.5% per annum |
| (c) | SMR Spread: | 3.2% per annum |
| (d) | Tracker Rate Spread: | 1.7% per annum |
| (a) Reasons for the offer |
See "Use of Proceeds" in the Base Prospectus |
|---|---|
| ------------------------------ | ---------------------------------------------- |
(b) Estimated net proceeds: £997,800,000
Save as discussed in "Subscription and Sale and Transfer and Selling Restrictions", so far as the Issuer and the LLP are aware, no person involved in the issue of the Covered Bonds has an interest material to the offer. The Joint Lead Managers and their affiliates have engaged and may in the future engage in investment banking and/or commercial banking transactions with and may perform other services for the Issuer and/or the LLP and its or their affiliates in the ordinary course of business.
| (a) | ISIN Code: | XS2974170610 |
|---|---|---|
| (b) | Common Code: | 297417061 |
| (c) | CFI Code: | DTVXFB, as updated, as set out on the website of the Association of National Numbering Agencies (ANNA) or alternatively sourced from the responsible National Numbering Agency that assigned the ISIN |
| (d) | FISN: | NATIONWIDE BUIL/VAREMTN 20300114, as updated, as set out on the website of the Association of National Numbering Agencies (ANNA) or alternatively sourced from the responsible National Numbering Agency that assigned the ISIN |
| (e) | Insert here any other relevant codes such as CUSIP AND CINS codes: |
Not Applicable |
| (f) | Names and addresses of additional Paying Agent(s) (if any): |
Not Applicable |
| (g) | Intended to be held in a manner which would allow Eurosystem eligibility: |
No. Whilst the designation is specified as "no" at the date of these Final Terms, should the Eurosystem eligibility criteria be amended in the future such that the Covered Bonds are capable of meeting them the Covered Bonds may then be deposited with one of the ICSDs as common safekeeper (and registered in the name of a nominee of one of the ICSDs acting as common safekeeper). Note that this does not necessarily mean that the Covered Bonds will then be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem at any time during their life. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met. |
| (h) | Relevant Benchmark(s): | SONIA is provided by the Bank of England. As at the date hereof, as far as the Society is aware, the Bank of |
England is not currently required to obtain authorisation/registration under the UK Benchmarks Regulation. SONIA does not fall within the scope of the UK Benchmarks Regulation by virtue of Article 2 of the UK Benchmarks Regulation.
| US Selling Restrictions: | Reg. S Compliance Category 2; TEFRA D | ||||
|---|---|---|---|---|---|
| 8. | YIELD (Fixed Rate Covered Bonds only) | ||||
| Indication of yield: | Not Applicable | ||||
| The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield |
|||||
| 9. | US | FEDERAL CONSIDERATIONS |
INCOME | TAX | Not Applicable |
Signed on behalf of the Issuer:
By: ________________________________________
Duly authorised
Signed on behalf of the LLP:
By: ________________________________________ Duly authorised
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