HSBC tenders for $600 million of QBE’s subordinated notes due 2041

New York, May 25 – Hongkong and Shanghai Banking Corp. Ltd. said it has begun a tender offer for $600 million of the $1 billion outstanding of fixed-rate reset guaranteed exchangeable subordinated callable notes due 2041 issued by QBE Capital Funding III Ltd. and guaranteed by QBE Insurance Group Ltd.

Pricing will be set using a spread of 270 basis points over the 1.375% Treasury due April 30, 2021, according to a news release.

The calculation will use the sum of all remaining payments of principal and interest up to and including May 24, 2021, the first interest rate reset date of the notes.

To receive the full payment amount, including the $50.00 per $1,000 early tender premium, holders must submit their notes for purchase by 5 p.m. ET on June 8. After that time, the payment for the notes will be the amount set using the pricing formula less the $50.00 early tender premium.

Pricing will be fixed at 10 p.m. ET on June 8.

The tender will end at 11:59 p.m. ET on June 22.

HSBC will also pay accrued interest on notes purchased up to but excluding the settlement date, scheduled for June 9 in the case of early tenders and June 23 for remaining tenders.

If the offer is oversubscribed, tenders will be accepted on a pro rata basis subject to a minimum denomination of $200,000.

No notes will be accepted after the early tender deadline if the $600 million maximum amount is reached by that early cut-off.

QBE said it is carrying out the offer in order to “help enhance the efficiency of the company’s capital base.”

Hongkong and Shanghai Banking Corp. Ltd. (+852 2822 28781, 212 525-5552 or 888 HSBC-4LM), Morgan Stanley & Co. LLC (212 761-1057, 800 624-1808 or LMGNY@morganstanley.com) and National Australia Bank Ltd. (+61 2 9237 9518 or nicholas.chaplin@nab.com.au) are dealer managers. D.F. King & Co., Inc. (212 269-5550, 866 620-8437 or qbe@dfking.com) is tender agent.

QBE is a Sydney, Australia-based insurance company.

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