Milbank Represents Sovereign Bankcorp in Offerings Raising $1.9 Billion of Additional Capital

News
May 22, 2008

FOR IMMEDIATE RELEASE
Firm Advises Second Largest Thrift In The US In Separate Common Stock And Subordinated Note Offerings

NEW YORK, May 22, 2008 -- Sovereign Bancorp Inc., the holding company for Sovereign Bank, the second largest regulated thrift in the United States, has issued approximately $1.4 billion of common shares and Sovereign Bank has issued $500 million of subordinated debt securities that qualified as Tier II regulatory capital. Milbank, led by partner Douglas Tanner, represented Sovereign in both issuances.

Mr. Tanner noted, “This was an important transaction for Sovereign, and increased its capital position to deal with the continuing fall-out from last fall’s credit crisis. Milbank was able to pull a team together in the Global Securities Group to close both transactions in less than three weeks, working seamlessly with the Global Corporate Group members who had already been working with Sovereign.”

In addition to New York-based partner Tanner, the Milbank team representing Sovereign included associates Jessica Zhou, Andrew Sullivan and Michael Lee of the Global Securities Group. Others involved in the transactions included partners Tom Janson and Roland Hlawaty and associates David Schwartz and John Timmerman of the Global Corporate Group. Tax advice was provided by Bruce Kayle.

Milbank has represented Sovereign on a number of matters, most significantly at the Board of Directors level for the past two years, but this was the first time Milbank has acted for Sovereign in a securities transaction. Lehman Brothers was the sole book-running manager of both offerings.

About the Offering:

Sovereign Bancorp, Inc., based in Philadelphia, PA, the shares of which are listed on the New York Stock Exchange, issued 179,687,500 shares of common stock at a purchase price of $8.00 per share for net proceeds, after the underwriting discount and offering expenses, of approximately $1.39 billion. The number of shares sold includes 23,437,500 shares sold pursuant to the exercise in full of the underwriter’s over-allotment option. The public offering was made under a shelf registration statement filed with the SEC. Sovereign Bank issued $500 million of 8.75% subordinated notes which mature on May 30, 2018. The Bank offering was made pursuant to the Section 3(a)(5) exemption under the Securities Act and an accelerated offering process agreed to by the federal Office of Thrift Supervision. Sovereign indicated it intends to use the proceeds for general corporate and banking purposes.

About Milbank

Milbank, Tweed, Hadley & McCloy LLP is a preeminent global law firm that for more than 140 years has provided innovative legal solutions in many of the world’s largest, most complex, “first-ever” corporate transactions and litigation. Our transactional expertise includes capital markets, corporate finance and transactions, project finance, acquisition finance, and other major fields of law practice. Milbank litigation teams resolve disputes involving mergers and acquisitions, proxy battles, financings and securities offerings, intellectual property, white collar crime, and corporate restructurings, among others. Our clients range from prominent multinational financial, industrial and commercial enterprises to governments, institutions and individuals. The Firm is headquartered in New York with offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, Singapore, Tokyo and Washington, DC.