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Bond Market News
HSBC Prices $2.5bn Two-Part AT1 Deal
September 5, 2024
HSBC raised $2.5bn via a two-part AT1 deal.
- It raised $1.35bn via a PerpNC5.5 AT1 bond at a yield of 6.875%, 75bp inside initial guidance of 7.625% area. The coupon is fixed until 11 March 2030, and if not called, resets then and every five years thereafter to the prevailing 5Y UST plus the initial margin of 329.8bp. Below is a table comparing HSBC’s latest issuance with other comparable peers’ bank AT1s (sorted by the YTC).
- It also raised $1.15bn via a PerpNC10 AT1 bond at a yield of 6.95%, 67.5bp inside initial guidance of 7.625% area. The coupon is fixed until 11 September 2034, and if not called, resets then and every five years thereafter to the prevailing 5Y UST plus the initial margin of 319.1bp. Below is a table comparing HSBC’s latest issuance with other comparable peers’ bank AT1s (sorted by the YTC).
The junior subordinated notes are rated Baa3/BBB. Proceeds will be used for general corporate purposes and to maintain or further strengthen its capital base. A trigger event would occur if at any time the non-transitional CET1 Ratio is less than 7.0%.
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