HSBC to issue $1.5 billion of contingent convertible bonds

HSBC plans to raise $1.5 billion through perpetual subordinated contingent convertible securities, Business Recorder reported on Friday. The bank said proceeds will support its capital position and general corporate needs, with the securities scheduled for issue on November 13. They will pay a 7.625% coupon, which remains fixed until May 13, 2032.

Conversion into HSBC shares would occur automatically if its common equity Tier 1 ratio falls below 7.0%. After the initial fixed-rate period, the coupon will reset every five years using the five-year US Treasury yield plus 3.004%, and HSBC expects a listing on Euronext Dublin’s Global Exchange Market within 30 days of issue. The offer uses an existing shareholder-approved mandate, while an earlier announcement this week covered $4.25 billion in senior unsecured notes due in 2032 and 2037.