Published on 6/8/2022 in the Prospect News Investment Grade Daily.
New Issue: HSBC sells $3.5 billion fixed-to-floaters due 2025, 2028
By Cristal Cody
Chicago, June 8 – HSBC Holdings plc priced $3.5 billion of fixed-to-floating rate senior notes across two series (A3/A-/A+), according to a market source and FWP filings with the Securities and Exchange Commission.
The bank priced $1.25 billion of notes due Dec. 9, 2025 that start with a 4.18% coupon. The rate resets to SOFR plus 151 basis points for the final year.
The notes priced at par for a 165 bps spread over Treasuries. Talk had been in the 175 bps area.
After six months, the notes can be optionally redeemed with a make-whole premium of Treasuries plus 25 bps until the Dec. 9, 2024 par redemption date (also the reset date).
HSBC also priced $2.25 billion of six-year notes, also with a fixed-to-floating rate coupon. The initial coupon is 4.755% and resets to SOFR plus 211 bps for the final year.
Pricing at par, the notes came with a 195 bps spread to Treasuries. Talk was in the 215 bps area.
The notes are non-callable for six months. Starting Dec. 9, the notes can be redeemed early with a Treasuries plus 30 bps make-whole premium until the June 9, 2027 par redemption date.
HSBC Securities (USA) Inc. is the bookrunner.
HSBC Holdings is a London-based banking and financial services group.
| Issuer: | HSBC Holdings plc
|
| Amount: | $3.5 billion
|
| Issue: | Fixed-to-floating rate senior notes
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| Bookrunners: | HSBC Securities (USA) Inc.
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| Co-managers: | Academy Securities, Inc., AmeriVet Securities, Inc., ABN Amro Securities (USA) LLC, Bancroft Capital, LLC, BMO Capital Markets Corp., Blaylock Van, LLC, Cabrera Capital Markets LLC, CastleOak Securities, LP, CIBC World Markets Corp., Citigroup Global Markets Inc., C.L. King & Associates, Inc., Credit Agricole Securities (USA) Inc., Erste Group Bank AG, Great Pacific Securities, ING Financial Markets LLC, Intesa Sanpaolo SpA, J.P. Morgan Securities LLC, Lloyds Securities Inc., Mizuho Securities USA LLC, MFR Securities, Inc., Natixis Securities Americas LLC, Nordea Bank Abp, RB International Markets (USA) LLC, R. Seelaus & Co., LLC, Banco de Sabadell, SA, Samuel A. Ramirez & Co., Inc., Santander Investment Securities Inc., Skandinaviska Enskilda Banken AB (publ), Siebert Williams Shank & Co., LLC, SMBC Nikko Securities America, Inc., UniCredit Capital Markets LLC and Wells Fargo Securities, LLC
|
| Trustee: | Bank of New York Mellon, London Branch
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| Puts: | Non-putable
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| Trade date: | May 31
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| Settlement date: | June 9
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| Ratings: | Moody’s: A3
|
| S&P: A-
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| Fitch: A+
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| Distribution: | SEC registered
|
|
|
| 2025 notes
|
| Amount: | $1.25 billion
|
| Maturity: | Dec. 9, 2025
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| Coupon: | 4.18% initial rate, resets to SOFR plus 151 bps starting Dec. 9, 2024
|
| Price: | Par
|
| Yield: | 4.18%
|
| Spread: | Treasuries plus 165 bps
|
| Call features: | Make-whole call starting Dec. 9, 2022 at Treasuries plus 25 bps until Dec. 9, 2024, the par call date
|
| Price talk: | Treasuries plus 175 bps area
|
| Cusip: | 404280DE6
|
|
|
| 2028 notes
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| Amount: | $2.25 billion
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| Maturity: | June 9, 2028
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| Coupon: | 4.755% initial rate, resets to SOFR plus 211 bps starting June 9, 2027
|
| Price: | Par
|
| Yield: | 4.755%
|
| Spread: | Treasuries plus 195 bps
|
| Call features: | Make-whole call starting Dec. 9, 2022 at Treasuries plus 30 bps until June 9, 2027, the par call date
|
| Price talk: | Treasuries plus 215 bps area
|
| Cusip: | 404280DF3
|
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