Commentary & Deal Flow

Tranche 1 (PerpNC6): Final Books £3.5bn+. Peak book £4.5bn+ (pre-rec)

Launched: PerpNC6: £750m @ 7.50% - Books £4.5bn+ (pre-rec)
Book update: Books £3bn
IPTs: PerpNC6: 8.000% area (S/A)

• Issuer: Nationwide Building Society
• Ticker: NWIDE
• LEI: 549300XFX12G42QIKN82
• Offering Format: Standalone, Reg S, Registered. The AT1 securities will be deferred shares for the purposes of section 119 of the Building Societies Act 1986, will not be protected deposits for the purpose of the Financial Services Compensation Scheme established under the Financial Services and Markets Act 2000, will not be withdrawable and will be ‘deferred share investments’ (but not ‘deferred share (core capital) investments’) for the purposes of the rules of the Society.
• Issuer Rating: A1 (Stable) / A+ (Stable) / AA- (Stable) by Moody’s / S&P / Fitch
• Expected Ratings of Issue: Baa3 / BBB- by Moody’s / Fitch
• Currency / Expected Size: £750m
• Launch Final Terms: £750m @ 7.50% (S/A Coupon)
• Settlement Date: Expected 30-Sep-26 (T+7)
• Maturity Date: Perpetual
• First Call Date: 20-Dec-32
• Reset Dates: First Call Date and each fifth anniversary thereafter (each a "Reset Date")
• Optional Redemption: The Society may in its sole discretion elect to repay all, but not some only, of the AT1 securities then outstanding on 20-Dec-32 (the “First Call Date”) or any Reset Date thereafter, in each case at their nominal amount together with accrued but unpaid interest thereon up to (but excluding) the date of repayment (excluding interest which has been cancelled in accordance with the Conditions). In addition, the Society may in its sole discretion elect to repay, in whole but not in part, the AT1 securities at any time if a Tax Event or a Regulatory Event has occurred and is continuing, at their nominal amount, in each case together with any accrued but unpaid interest thereon up to (but excluding) the date of repayment (excluding interest which has been cancelled in accordance with the Conditions). Any such repayment is subject to certain conditions and regulatory approval, all as set out in the Conditions
• Status of the Securities: Direct, unsecured and subordinated investments in the Society. On a winding up or dissolution of the Society which commences prior to the Conversion Date (save as otherwise provided in an Excluded Dissolution), the rights and claims of Securityholders shall, subject to applicable insolvency law, rank: (1) senior to claims in respect of Junior Obligations (including CCDS), (2) junior to claims in respect of the Senior Obligations (including the Existing PIBS, obligations of the Society which constitute Tier 2 Capital and other subordinated creditors), and (3) pari passu among themselves and with any other claims ranking, or expressed by their terms to rank pari passu with claims in respect of the AT1 securities, in each case as further set out in the Conditions
• No Set-off: Subject to applicable law, no holder of Security (or any interest therein) may exercise, claim or plead any right of set-off (including, without limitation, compensation or retention), counterclaim or netting in respect of any amount owed to it by the Society in respect of, or arising under or in connection with, the AT1 securities and each holder shall, by virtue of its holding of any AT1 security (or any interest therein), be deemed to have waived all such rights of set-off (including, without limitation, compensation or retention), counterclaim or netting
• Solvency Test: All payment of interest, principal or any other amount in respect of the AT1 securities are conditional on the Society being able to make such payment and still remaining solvent (as defined in the Conditions) immediately thereafter, in each case except in the winding up or dissolution of the Society
• Interest Rate: The AT1 securities will bear interest from (and including) the Issue Date on their outstanding nominal amount, in accordance with the provisions of Condition 5: (i) for each Interest Period which commences prior to the First Call Date, at the Initial Interest Rate; and (ii) for each Interest Period which commences on or after the First Call Date, at the applicable 5yr Gilt + initial credit spread (being the sum of the applicable Benchmark Gilt Reset Reference Rate and the Margin), as calculated by the Principal Paying Agent.
• Interest Payment Dates: Semi-annually in arrear on 20 June and 20 December of each year, commencing on 20-Dec-26 (short first Interest Period)
• Interest Cancellation: Optional cancellation of interest at the Society’s sole discretion in whole or in part at any time. Mandatory cancellation of interest (i) at the direction of the Regulator, (ii) if any interest payment cannot be made in compliance with the Solvency Test, (iii) to the extent required under then prevailing Capital Regulations, due to insufficient Distributable Items, (iv) to the extent required under then prevailing Capital Regulations, if any interest payment would cause any Maximum Distributable Amount applicable to the Society to be exceeded or (v) if a Conversion Trigger occurs
• Substitution or Variation: If a Tax Event or a Regulatory Event has occurred and is continuing, then the Society may in its sole discretion but subject to certain conditions, including obtaining regulatory approval, at its option and without any requirement for the consent or approval of the Securityholders, at any time either substitute all (but not some only) of the AT1 securities for, or vary the terms of the AT1 securities so that they remain or, as appropriate, become, Compliant Securities
• Conversion: If at any time, the CET1 Ratio (calculated on either an individual consolidated basis or a consolidated basis, as further described in the Conditions) of the Society falls below 7.00 per cent. (a "Conversion Trigger"), as determined by the Society or the Regulator (or its agent), the Society will: cancel any interest which has accrued and remains unpaid up to (and including) the relevant Conversion Date (whether or not such interest has become due for payment); irrevocably (without the need for the consent of Securityholders) write down the AT1 securities by reducing the nominal amount of each Security to zero; and (subject as provided in Condition 8) issue to each Securityholder such number of Core Capital Deferred Shares ("CCDS") as is equal to the aggregate nominal amount of that Securityholder's AT1 securities divided by the prevailing Conversion Price. Once the nominal amount of an AT1 security has been written down, it will not be restored in any circumstances, including where the relevant Conversion Trigger ceases to continue
• Conversion Price: £100.00, subject to adjustment in certain circumstances provided in Condition 8.5
• Acknowledgement of Bail-In Power: By its acquisition of any AT1 security (or any interest therein), each Securityholder, and each holder of a beneficial interest in any AT1 security will acknowledge and accept that Amounts Due arising under the AT1 securities may be subject to the exercise of the Bail-in Power by the Resolution Authority and will acknowledge, accept, consent and agree to be bound by the consequences of such exercise, as further outlined in Condition 19
• Events of default: There are no events of default in the Conditions of the AT1 securities and only limited enforcement rights
• Succession and Transfer: Condition 13 contains provisions applicable to the AT1 securities upon an amalgamation by the Society with another building society, a transfer of all or substantially all of its engagements to another building society or a transfer by the Society of the whole of its business to a company, all in accordance with the Building Societies Act 1986, as amended. Those provisions enable (in the context of such amalgamation or transfer only, and subject to certain conditions and restrictions) certain amendments to be made to the terms of the AT1 securities without the consent of the Securityholders, or the Securityholders may receive, in place of their AT1 securities, new securities issued by the Successor Entity or, where applicable, its Qualifying Parent. In certain circumstances, this may result in the AT1 securities (or replacement instruments) ceasing to be convertible into CCDS upon the occurrence of a Conversion Trigger, and such AT1 securities (or replacement instruments) may instead become subject to permanent write-down if a Conversion Trigger occurs.
• Society Conversion Benefits: Any conversion benefits under the terms of any future transfer of the Society’s business to a company will be waived by Securityholders and assigned to a charity assignee selected by the Society (this is without prejudice to the rights of Securityholders under Condition 13)
• Documentation: Standalone format. Preliminary Offering Circular dated 21-Sep-26 and final Offering Circular expected to be dated on or around 28-Sep-26, including the section “Conditions of Issue of the Securities” (the “Conditions”). Defined terms used herein and not otherwise defined have the meaning given in the Conditions.
• Denominations: £200,000 and integral multiples of £1,000 in excess thereof
• Day Count: Actual / Actual (ICMA)
• Listing: London Stock Exchange’s International Securities Market (ISM)
• Governing Law: English law
• Use of Proceeds: The net proceeds of the issue of the AT1 securities will in part be used to fund, in whole or in part, the acquisition by the Society of some or all of its outstanding £750,000,000 Reset Perpetual Contingent Convertible Additional Tier 1 Capital Securities (ISIN: XS2113658202) pursuant to the cash tender offer announced by the Society on 21-Sep-26, and the remainder will be used by the Society to strengthen its regulatory capital base and for general business purposes consistent with the Society’s principal purpose as a UK building society.
• ISIN / Common Code: XS3475909324 / 347590932
• Joint Bookrunners: BofA Securities, J.P. Morgan (B&D), Lloyds Bank Corporate Markets, NatWest and UBS Investment Bank
• Target Market: UK MiFIR product governance: Professional clients and eligible counterparties only (all distribution channels). No sales to EEA or UK retail investors. No EEA PRIIPS key information document (KID), UK PRIIPs KID or UK CCI product summary has been prepared as the AT1 securities are not available to retail investors in the EEA or UK
• FCA CoCo Restriction: The AT1 securities are not intended to be offered, sold or otherwise made available and should not be offered, sold or otherwise made available to retail clients (as defined in the FCA’s Conduct of Business Sourcebook 3.4) in the UK
• Selling Restrictions: The United States (Regulation S, Category 2), the United Kingdom, the EEA, Canada (offers/sales into Ontario/Alberta/British Columbia only, subject to compliance with applicable law), Italy and Singapore. Restrictions may apply in other jurisdictions – investors are responsible for ensuring compliance with all applicable restrictions.
• Advertisement: This communication is not a prospectus for purposes of the Prospectus Rules: Admission to Trading on a Regulated Market sourcebook of the FCA Handbook made in accordance with the Public Offers and Admissions to Trading Regulations 2024 or Regulation (EU) 2017/1129, and no such prospectus is required to be (or will be) prepared by the Society or the Joint Bookrunners in connection with the AT1 securities. Prospective investors should not subscribe for any AT1 securities except on the basis of the information in the final Offering Circular. The final Offering Circular will be published on the website of the Society (https://www.nationwide.co.uk/investor-relations/at1-terms-of-access/) once available.
• Stabilisation: FCA/ICMA stabilisation
• Timing: Today’s business
• Books Subject: 1pm UKT
• Pricing: At par, no hedges
• B&D: JPM
• Note: In conjunction with Tender of NWIDE £750m 5.75% Perp Jun-27s (ISIN XS2113658202) at 100.55px