Fitch Downgrades Long-term IDR of Santander Holdings USA

Fitch Ratings has downgraded the Long-term Issuer Default Rating (IDR) of Santander Holdings USA, Inc. (SHUSA) to 'A-' from 'A+'. This action was taken as a result of the downgrade of the Long-term IDR of the parent company, Banco Santander, announced today. Please see 'Fitch Downgrades Santander to 'A'/Negative Outlook Following Sovereign Action' for further details on the rating action of the parent.

The Short-term IDR of SHUSA was affirmed at 'F1', a level in line with the parent's rating. Since the IDRs of SHUSA are correlated to those of Banco Santander, changes in Banco Santander's IDRs result in changes to SHUSA's IDRs. The rating outlook for SHUSA is negative in line with the outlook for Banco Santander.

The multiple-notch downgrade of hybrid instruments reflects of Fitch's new bank regulatory capital securities rating criteria entitled 'Rating Bank Regulatory Capital and Similar Securities' dated Dec. 15, 2011. A complete list of ratings for SHUSA and its subsidiaries follows.

Fitch has taken the following rating actions:

Santander Holdings USA, Inc

-- Long-term IDR: downgraded to 'A-' from 'A+'; removed from Rating Watch Negative; Outlook Negative;

-- Short-term IDR: affirmed at 'F1';

-- Viability Rating: 'bbb' unaffected;

-- Support Rating: affirmed at '1'

-- Senior unsecured debt: downgraded to 'A-' from 'A+'

-- Commercial Paper: affirmed at 'F1'.

Sovereign Bank

-- Long-term IDR: downgraded to 'A-' from 'A+'; removed from Rating Watch Negative; Outlook Negative;

-- Short-term IDR: affirmed at 'F1';

-- Viability Rating: 'bbb' unaffected;

-- Support Rating: affirmed at '1';

-- Long-term deposit rating: downgraded to 'A' from 'AA-';

-- Short-term deposit rating: downgraded to 'F1' from 'F1+;

-- Subordinated debt: downgraded to 'BBB+' from 'A'.

Sovereign Capital Trust I

-- Preferred stock: downgraded to 'BB+' from 'A-'; removed from Rating Watch Negative.

Sovereign Capital Trust IV

-- Preferred stock: downgraded to 'BB+' from 'A-'; removed from Rating Watch Negative.

Sovereign Capital Trust VI

-- Preferred stock: downgraded to 'BB+' from 'A-'; removed from Rating Watch Negative.

Sovereign Real Estate Investment Trust Holdings

-- Preferred stock: downgraded to 'BB' from 'A-'; removed from Rating Watch Negative.

ML Capital Trust I

-- Preferred stock: downgraded to 'BB+' from 'A-'; removed from Rating Watch Negative.

Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

-- 'Global Financial Institutions Rating Criteria' (Aug. 16, 2011).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=649171

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