HSBC Finance holders exchange $1.8 billion of notes in private offers

By Angela McDaniels

Tacoma, Wash., Nov. 30 - HSBC Finance Corp. received tenders for $1,797,128,000 of notes during private exchange offers for six series of its notes, according to company news releases.

The company offered new 6.676% senior subordinated notes due Jan. 15, 2021 in both offers.

In the first offer, the company said it would accept any and all of its $627,495,000 of 7.625% senior notes due 2032 and $250 million of 7.35% senior notes due 2032.

Holders tendered $530.62 million of the 7.625% notes and $222,738,000 of the 7.35% notes.

For each $1,000 principal amount, holders will receive $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 was for the company's $2,467,260,000 of 5.5% senior notes due 2016, $1,987,508,000 of 5% senior notes due 2015, $737,185,000 of 5.25% senior notes due 2014 and $696,306,000 of 5.25% senior notes due 2015. These notes are listed in order of acceptance priority level.

Holders tendered $607.87 million of the 5.5% notes, $306,498,000 of the 5% notes, $75,465,000 of the 5.25% notes due 2014 and $53,937,000 of the 5.25% notes due 2015.

The company said it would accept any and all 5.5% notes tendered. The remaining notes were subject to a cap of $892.13 million, which is $1.5 billion minus the principal amount of 5.5% notes accepted. If the amount of notes tendered had exceeded the cap, the notes would have been accepted according to their priority level and subject to proration.

For each $1,000 principal amount, holders will receive $1,119.98 of the new notes for the 5.5% notes, $1,109.25 of new notes for the 5% notes, $1,098.98 of new notes for the 5.25% notes due 2014 and $1,114.82 of new notes for the 5.25% notes due 2015.

In each case, holders will also receive accrued interest. The settlement date is expected to be Dec. 3.

Each exchange amount noted above includes an early tender payment payable to holders who tendered their notes by 5 p.m. ET on Nov. 12.

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 both series of notes in the first offer. In the second offer, the respective yields were 2.96%, 2.46%, 1.96% and 2.46%.

The exchange offers began Oct. 28 and expired at 8 a.m. ET on Nov. 30.

The offers were only 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 was 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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