HSBC to issue $1.5 billion of contingent convertible bonds
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…
HSBC, Europe's largest bank, has announced plans to issue $1.5 billion of perpetual subordinated contingent convertible securities. The issuance aims to bolster the bank's capital base and serve general corporate purposes, according to the company. The securities, which bear a 7.625% coupon, will be released on November 13. If the bank's common equity Tier 1 ratio, a crucial indicator of a bank's financial strength, drops below 7.0%, the securities will automatically convert into shares.
HSBC anticipates listing the securities on Euronext Dublin's Global Exchange Market within 30 days of issuance. The bank's issuance aligns with a shareholder-approved mandate, eliminating the need for a further shareholder vote. The coupon rate remains fixed until May 13, 2032, after which it will reset every five years at the five-year US Treasury yield plus 3.004%.
Prior to this announcement, HSBC revealed plans for a $4.25 billion issuance of senior unsecured notes in two tranches, due in 2032 and 2037.
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