Santander Skips AT1 Call Option in Costly Refinancing Market (2)

Banco Santander SA opted not to redeem a €1 billion ($1.1 billion) additional tier 1 bond, an unusual move even amid the turbulent market for bank debt this year.

The redemption had been hanging in the balance over the past few weeks as the first date to call the bond approached on Sept. 29. Santander’s bond has been trading more than one cent on the euro below face value, indicating traders didn’t see a call as a certainty.

Analysts saw Santander as unlikely to call the bond without issuing a new one, because to do so would exacerbate its ...