HSBC Finance sets pricing in exchange offer for six series of notes

By Jennifer Chiou

New York, Nov. 10 - HSBC Finance Corp. announced pricing terms for its private exchange offers for six series of its notes.

The company is offering new fixed-rate senior subordinated notes due Jan. 15, 2021 in both offers. HSBC also announced that the coupon for the new notes will be 6.676%.

In the first offer, the company will accept any and all of its 7.625% senior notes due 2032 and 7.35% senior notes due 2032. For each $1,000 principal amount, it is offering $1,038.56 of new notes for the 7.625% notes and $1,009.02 of new notes for the 7.35% notes.

The second offer is for the company's 5.5% senior notes due 2016, 5% senior notes due 2015, 5.25% senior notes due 2014 and 5.25% senior notes due April 15, 2015. These notes are listed in order of acceptance priority level.

For each $1,000 principal amount, HSBC is offering $1,119.98 of the new notes for the 5.5% first-priority notes, $1,109.25 of new notes for the 5% notes, $1,098.98 of new notes for the third-priority 5.25% notes and $1,114.82 of new notes for the fourth-priority 5.25% notes.

The company will accept any and all 5.5% notes tendered. For the remaining notes, the principal amount accepted will be $1.5 billion minus the principal amount of 5.5% notes accepted.

The total exchange ratio for each series of the notes was based on a fixed-spread pricing formula calculated at 2 p.m. ET on Nov. 10. HSBC used a yield of 7.267% for each of the notes series in the first offer. In the second offer, the respective yields were 2.96%, 2.46%, 1.96% and 2.46%.

The total exchange ratio includes an early tender payment payable to holders who tender notes by 5 p.m. ET on Nov. 12.

The exchange offers will expire at 8 a.m. ET on Nov. 30.

The offers are only being made to qualified institutional buyers and persons who are not U.S. persons, both as defined under the Securities Act of 1933.

The information agent is Global Bondholder Services Corp. (212 430-3774 or 866 470-4300).

The financing arm of financial services company HSBC Holdings plc is based in Mettawa, Ill.

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