SKN | Santander Commits €200 Million to Merlin Properties’ €3.75 Billion Sustainable Financing Package

Key Takeaways:

• Banco Santander plans to contribute €200 million to Merlin Properties’ €3.75 billion syndicated financing package, representing 13.33% of the revolving credit facility and 5.33% of the total financing.
• The financing consists of a €2.25 billion green loan and a €1.5 billion revolving credit facility linked to sustainability targets.
• The transaction will replace Merlin’s existing syndicated financing from 2023 and support its debt restructuring, medium- and long-term funding requirements, and data center development strategy.

Santander Participates in Merlin’s New Financing Agreement

Banco Santander will participate with €200 million in a new €3.75 billion sustainable syndicated financing agreement signed by Merlin Properties, the Spanish real estate investment company.

The financing is intended to reorganize Merlin’s corporate debt and address its medium- and long-term funding requirements. A central strategic priority is supporting the company’s data center development programme, which forms part of its broader real estate investment strategy.

Merlin submitted details of the transaction to Spain’s National Securities Market Commission (CNMV) on Thursday. The disclosure was required because Santander is a significant shareholder in Merlin, making its participation in the financing a related-party transaction.

The agreement received approval at a Merlin Board of Directors meeting held on 15 October 2026. Executive directors appointed by Santander abstained from voting on the transaction, reflecting the governance arrangements associated with the bank’s shareholder relationship.

Two-Tranche Structure Combines Green Financing and Revolving Credit

The €3.75 billion financing package has been arranged through a banking syndicate comprising Spanish and international financial institutions, including Banco Santander.

The agreement is divided into two facilities:

• Facility A: A €2.25 billion green loan.
• Facility B: A €1.5 billion revolving credit facility linked to the achievement of sustainability targets.

Santander intends to participate in Facility B with a commitment of €200 million. This represents 13.33% of the revolving credit facility and 5.33% of the overall financing package.

The structure combines dedicated green financing with a revolving credit arrangement tied to sustainability objectives. It provides Merlin with a substantial funding framework while connecting part of its financing arrangements to defined sustainability targets.

The disclosure does not specify the individual sustainability indicators or performance thresholds governing Facility B.

Debt Refinancing and Long-Term Financial Planning

The new syndicated agreement will replace the existing financing arrangement signed in 2023. According to Merlin, the transaction forms part of a broader strategy to manage its corporate debt maturity schedule in advance.

Replacing the previous facility provides an opportunity to reorganize financing commitments and address upcoming funding requirements through a consolidated arrangement.

The agreement also supports Merlin’s medium- and long-term capital requirements, including investment in its data center development programme. For the company, maintaining access to substantial syndicated financing is relevant to managing its investment pipeline while coordinating debt obligations.

For participating banks, the transaction represents an allocation of financing capacity within a large corporate lending arrangement. Santander’s €200 million commitment establishes its position as one of the participating lenders in the revolving facility.

Floating-Rate Terms and Financing Costs

Both financing facilities accrue interest at a floating rate referenced to Euribor, with a floor of zero. Interest settlement periods are structured around one-, three- or six-month intervals.

The reported average financing cost is MS + 100 basis points. The agreement also maintains a commission structure described in the CNMV disclosure as consistent with customary market practice for this type of transaction.

The floating-rate structure means the financing cost will remain exposed to movements in Euribor, subject to the contractual terms. This makes the future interest expense relevant to Merlin’s financing strategy and broader debt-management considerations.

Closing Insights

Santander’s €200 million participation in Merlin Properties’ €3.75 billion sustainable financing package highlights the continued role of major banking institutions in supporting large-scale corporate refinancing and real estate investment.

The transaction combines debt restructuring with funding for Merlin’s longer-term strategic priorities, particularly its data center expansion. Its two-tranche structure also reflects the growing use of financing arrangements that incorporate green lending and sustainability-linked credit facilities.

Going forward, attention will focus on Merlin’s execution of its data center investment programme, the management of its revised debt maturity profile and the cost implications of its floating-rate facilities. The achievement of the sustainability targets associated with Facility B will also be relevant to assessing the financing structure over time.

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