HSBC to launch $1.5 billion of contingent convertible bonds at 7.625% coupon
HSBC Holdings announced a perpetual subordinated contingent convertible (CoCo) issue of $1.5 billion, priced at a 7.625% coupon and scheduled for November 13. The securities are expected to generate about $1.485 billion in net proceeds, which the bank will use to bolster its capital base. Each bond can be converted into ordinary shares at $3.6342, potentially creating up to 413 million new shares, roughly 2.35% of the enlarged share capital. The bonds will be listed on Euronext Dublin within 30 days of issuance.
Why it matters
The proceeds add to HSBC’s Tier 1 capital, supporting regulatory capital ratios and providing a buffer against future stress scenarios. The conversion feature could dilute existing shareholders if the bank’s CET1 ratio falls below 7%, a risk noted in the issuance terms.
Key facts
- 1HSBC will issue $1.5 billion of perpetual subordinated contingent convertible securities on November 13. finance.biggo.com
- 2The bonds carry a 7.625% coupon. finance.biggo.com
- 3Net proceeds are expected to be approximately $1.485 billion. finance.biggo.com
- 4Initial conversion price is $3.6342 per share, allowing up to about 413 million ordinary shares to be issued. finance.biggo.com
- 5The securities will be admitted to trading on the Global Exchange Market of the Irish Stock Exchange (Euronext Dublin) within 30 days. finance.biggo.com
- 6Conversion is triggered if HSBC’s common equity Tier 1 ratio falls below 7.0%. thestandard.com.hk
Summary written by AlphAI AI Desk from 3 of 3 sources. Not investment advice. Figures are as stated by the linked sources.