HSBC accepts tenders for $456.19 million of QBE’s subordinated notes

New York, June 9 – Hongkong and Shanghai Banking Corp. Ltd. said that holders validly tendered $456,192,000 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. by the early tender deadline.

All validly tendered notes were accepted for purchase, according to a news release.

HSBC also announced that pricing for notes tendered by the early deadline was set at $1,148.57 per $1,000 principal amount. For notes tendered subsequently, the purchase price will be $1,098.57 per $1,000 principal amount.

Pricing was set at 10 p.m. ET on June 8 using a spread of 270 basis points over the 1.375% Treasury due April 30, 2021.

The calculation used 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 had to submit their notes for purchase by the early tender deadline of 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.

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.

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

HSBC announced that it was offering to buy $600 million of QBE’s notes on May 25.

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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