HSBC to issue $1.5 billion of contingent convertible bonds
- The securities carry a 7.625% coupon and will be issued on November 13, the company said
HSBC plans to issue $1.5 billion in perpetual convertible securities with a 7.625% coupon to strengthen its capital base. These securities convert to shares if its key capital ratio falls below 7%.
- The specific terms and coupon rate of the new securities.
- Conditions under which the securities would automatically convert to shares.
- Future coupon reset mechanisms for the convertible securities.
HSBC, Europe’s largest bank, said on Friday it plans to issue $1.5 billion of perpetual subordinated contingent convertible securities to strengthen its capital base and for general corporate purposes.
The securities carry a 7.625% coupon and will be issued on November 13, the company said.
The securities would convert automatically into shares if the bank’s common equity Tier 1 ratio, a key measure of a bank’s financial strength, falls below 7.0%.
The bank expects to list the securities on Euronext Dublin’s Global Exchange Market within 30 days of issuance.
It said the issue falls under a shareholder-approved mandate, so no further shareholder vote is needed.
HSBC said the coupon is fixed until May 13, 2032, after which it would reset every five years at the five-year US Treasury yield plus 3.004%.
Earlier this week, the bank had announced an issuance of $4.25 billion of senior unsecured notes in two tranches, due 2032 and 2037.