Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant. Issuance of FDIC Guaranteed Notes by Sovereign Bank On December 22, 2008, Sovereign Bank, a federal savings bank (the "Bank") and wholly-owned subsidiary of Sovereign Bancorp, Inc. (the "Company") issued $1,350,000,000 of 2.75% Senior Notes Due 2012 (the "Bank Notes"). The Bank Notes are guaranteed by the Federal Deposit Insurance Corporation (the "FDIC") under the FDIC's Temporary Liquidity Guarantee Program established pursuant to 12 C.F.R. part 370 (the "Guarantee Program").
The Bank Notes were issued pursuant to a Fiscal Agency Agreement dated December 22, 2008 between the Bank and The Bank of New York Mellon Trust Company, N.A., as fiscal agent (the "Bank Agency Agreement"). The Bank Notes were issued in the form of global notes, the form of which is included as Exhibit A to the Bank Agency Agreement attached as Exhibit 4.1 hereto. Interest on the Bank Notes is payable from December 22, 2008 to maturity on January 17, 2012 on each January 17 and July 17 commencing July 17, 2009. The Bank Notes are not subject to redemption prior to maturity.
Issuance of FDIC Guaranteed Notes by Sovereign Bancorp, Inc. On December 22, 2008, the Company issued $250,000,000 of 2.50% Senior Notes Due 2012 (the "Bancorp Notes"). The Bancorp Notes are guaranteed by the FDIC under the Guarantee Program.
The Bancorp Notes were issued pursuant to a Fiscal Agency Agreement dated December 22, 2008 between the Company and The Bank of New York Mellon Trust Company, N.A., as fiscal agent (the "Bancorp Agency Agreement"). The Bancorp Notes were issued in the form of a global note, the form of which is included as Exhibit A to the Bancorp Agency Agreement attached as Exhibit 4.2 hereto. Interest on the Bancorp Notes is payable from December 22, 2008 to maturity on June 15, 2012 on each June 15 and December 15 commencing June 15, 2009. The Bancorp Notes are not subject to redemption prior to maturity. Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
4.1 Fiscal Agency Agreement dated December 22, 2008 between Sovereign Bank and The Bank of New York Mellon Trust Company, N.A., as fiscal agent.

4.2 Fiscal Agency Agreement dated December 22, 2008 between Sovereign Bancorp, Inc. and The Bank of New York Mellon Trust Company, N.A., as fiscal agent.

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