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Bond Market News
HSBC Prices SGD 10.5NC5.5 Tier 2 at 4.75%
March 6, 2024
HSBC raised S$750mn via a 10.5NC5.5 Tier 2 bond at a yield of 4.75%, 25bp inside initial guidance of 5% area. The subordinated notes are rated Baa1/BBB/A-, and received orders of over S$1.1bn, 1.5x issue size. By investor type, private banks took 56%, fund managers/insurers/pension funds took 37% and banks and other took 7%. By region, Singapore accounted for 90% and Europe/Rest of Asia took 10%. The bonds have a call/reset date on 12 September 2029. Proceeds will be used for general corporate purposes and to maintain or further strengthen issuer’s capital base pursuant to requirements under the UK CRR. The issuer may redeem notes in whole (but not in part) in sole discretion upon occurrence of certain tax events. Below is a table comparing the new issuance to comparable SGD Tier 2s, sorted by the yield to call.
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