Commentary & Deal Flow

Launched: PerpNC10: £500m @ 7.5% - Books £4.4bn+
IPTs: PerpNC10: 8.000-8.125%

• Issuer: NatWest Group plc
• LEI: 2138005O9XJIJN4JPN90
• Ticker: NWG
• Country: UK
• Notes: GBP 500m 7.5% Reset Perpetual Subordinated Contingent Convertible Additional Tier 1 Capital Notes (the “Contingent Capital Notes”)
• Issuer Ratings: A3/A-/A+ (Moody's/S&P/Fitch)
• Expected Issue Ratings: Baa3/BBB (Moody's/Fitch)
• Rating Split: Issuer: A3/A-/A+ (Moody's/S&P/Fitch), Issue: Baa3/BBB (Moody's/Fitch)
• Maturity: Perpetual
• Size: £500m
• Settlement: 03-Jun-26 (T+5)
• Books Subject: 12:30 UKT
• Status: The Contingent Capital Notes will constitute direct, unsecured and subordinated obligations of the Issuer, ranking pari passu without any preference among themselves. In the event of a Winding-up or Administration Event of the Issuer, the rights and claims of the holders and beneficial owners in respect of, or rising from, the Contingent Capital Notes (including any damages, if payable) will be subordinated to the claims of Senior Creditors.
• First Call Date: 03-Jun-36
• First Reset Date: 03-Dec-36
• Reset Dates: The First Reset Date and every fifth anniversary thereafter
• Optional Redemption Dates: The Issuer may, at the Issuer's option and in its sole discretion, redeem the Contingent Capital Notes, in whole but not in part, on (i) any day falling in the period commencing on (and including) the First Call Date and ending on (and including) the First Reset Date, and (ii) any Reset Date thereafter, in each case at 100 per cent. of their principal amount, together with any Accrued Interest to the date fixed for redemption subject to certain conditions set out in the Conditions including, but not limited to, the Issuer having complied with any pre-conditions as set out in the Capital Regulations and/or required by the PRA as a prerequisite to its permission for such redemption
• Early Redemption Events: Subject to certain conditions, in whole (but not in part), upon the occurrence of a Tax Event or Capital Disqualification Event, at 100% of their principal amount plus any Accrued Interest to the date fixed for redemption subject to certain conditions set out in the Conditions including, but not limited to, the Issuer having complied with any pre-conditions as set out in the Capital Regulations and/or required by the PRA as a prerequisite to its permission for such redemption
• Clean-up Call Option: If, at any time, the outstanding aggregate principal amount of the Contingent Capital Notes is 25 per cent. or less of the aggregate principal amount originally issued, the Issuer may at any time and at the Issuer's option and in its sole discretion redeem the Contingent Capital Notes, in whole but not in part, at a redemption price equal to 100 per cent. of the principal amount of the Contingent Capital Notes together with any Accrued Interest to (but excluding) the date fixed for redemption subject to certain conditions set out in the Conditions including, but not limited to, the Issuer having complied with any pre-conditions as set out in the Capital Regulations and/or required by the PRA as a prerequisite to its permission for such redemption
• Interest: 7.5% per annum from and including the Issue Date to but excluding the First Reset Date. Fixed rate reset on each Reset Date to the sum of the then prevailing 5-year Gilt gross redemption yield as further described in the conditions plus the initial margin.
• Interest Payment Dates: Quarterly in arrear on 31 March, 30 June, 30 September and 31 December of each year, commencing on 30-Jun-26 (short first coupon).
• Interest Payments Discretionary: Interest on the Contingent Capital Notes is due and payable only at the full discretion of the Issuer, and the Issuer shall have sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any Interest Payment Date. If the Issuer does not make an interest payment on the relevant Interest Payment Date, such interest payment (or the portion thereof not paid) shall not be, or become, due and payable.
• Restrictions on Interest Payments: The Issuer shall not make an interest payment on the Contingent Capital Notes on any Interest Payment Date (and such payment shall therefore be deemed to have been canceled) if (a) the Issuer has an insufficient amount of Distributable Items on any such scheduled Interest Payment Date or (b) the Solvency Condition is not (or would not be) satisfied in respect of such amounts payable on such Interest Payment Date. In addition, the Issuer shall not be permitted to pay any interest otherwise scheduled to be paid on an Interest Payment Date if the payment of such interest would cause, when aggregated together with other distributions, the Maximum Distributable Amount, if any, then applicable to the Group to be exceeded
• Solvency Condition: Payments in respect of or arising from the Contingent Capital Notes are in addition to the right of the Issuer to cancel payments of interest, conditional upon the Issuer being solvent at the time when the relevant payment is to be made and no principal, interest or other amount shall be due and payable in respect of or arising from the Contingent Capital Notes except to the extent that the Issuer could make such payment and still be solvent immediately thereafter. For the purposes of determining whether the Solvency Condition is met, the Issuer shall be considered to be solvent at a particular point in time if:it is able to pay its debts as they fall due; andits Assets are at least equal to its Liabilities.
• Automatic Conversion: Upon the occurrence of the Conversion Trigger Event, the Automatic Conversion will occur on the Conversion Date and all of the Issuer's obligations under the Contingent Capital Notes shall be irrevocably and automatically released in consideration of the Issuer's issuance and delivery of the Settlement Shares to the Settlement Share Depository
• Conversion Trigger Event: If at any point in time at which the CET1 Ratio of the Regulatory Group is less than 7.000 per cent
• Conversion Price: The Conversion Price is fixed at £1.764 per Settlement Share subject to certain anti-dilution adjustments
• Settlement Shares Offer: Subject to certain conditions, upon Automatic Conversion, the Issuer may elect that the Settlement Shares Depositary make an offer of all or some of the Settlement Shares to all or some of the Issuer's ordinary shareholders at such time at a cash price per Settlement Share not less than the Conversion Price subject to certain anti-dilution adjustments
• Substitution or Variation: If a Tax Event or a Capital Disqualification Event has occurred, then the Issuer may, at any time, and at the Issuer's option and in its sole discretion and without any requirement for the consent or approval of the Holders of the Contingent Capital Notes, either substitute all (but not some only) of the Contingent Capital Notes for, or vary the terms of the Contingent Capital Notes so that they remain or, as appropriate, become, Compliant Notes subject to certain conditions set out in the Conditions including, but not limited to, the Issuer having complied with any pre-conditions as set out in the Capital Regulations and/or required by the PRA as a prerequisite to its permission for such substitution or variation
• Agreement with Respect to the Exercise of UK Bail-in Power: No repayment or payment of Amounts Due on the Notes shall become due and payable or be paid after the exercise of any UK Bail-in Power by the Resolution Authority, unless permitted under applicable law
• No Set-Off: By acquiring a Contingent Capital Note, each holder (and the Trustee acting on behalf of the holders) will be deemed to have waived any right of set-off, netting, counterclaim or combination of accounts with respect to the Contingent Capital Notes or the Trust Deed (or between the Issuer's obligations under or in respect of the Contingent Capital Notes and any liability owed by a Holder to the Issuer) that they (or the Trustee acting on their behalf) might otherwise have against the Issuer, whether before or during any Winding-up or Administration Event.
• Day Count Fraction: Actual / Actual (ICMA)
• Denominations: £200,000 and integral multiples of £1,000 in excess thereof
• Governing Law: English Law & Scots Law (Subordination, Solvency Condition and waiver of the right of set-off)
• Listing: London Stock Exchange’s International Securities Market
• Form: Registered. RegS, Category 2
• Documentation: Standalone format. Preliminary Offering Circular dated 27-May-26. The final Offering Circular expected to be dated on or around 01-Jun-26.
• Selling Restrictions: U.S.: Regulation S, Category 2, no communications with or into the US; customary selling restrictions in the UK, EEA, Italy, Hong Kong, Japan, Singapore and as more fully set out in the Documentation
• Target Market: Manufacturer target market (UK MiFIR/MiFID II product governance) is eligible counterparties and professional clients only (all distribution channels). No PRIIPs key information document / CCI disclosure document has been prepared as not available to retail in the EEA or in the UK.
• Sole Bookrunner: NatWest (B&D)
• Joint Lead Managers (No Books): BofA Securities, Citigroup, J.P Morgan, Morgan Stanley, TD Securities, UBS Investment Bank, Wells Fargo Securities
• Common Code: 339486476
• ISIN: XS3394864766
• Timing: Today's business