HSBC Holdings plc has raised its cash tender ceiling for a $3 billion perpetual securities series to $1.5 billion, expanding the amount available to holders as it manages Tier 1 capital.
The increase, announced Nov. 6, follows an initial $1 billion ceiling set a day earlier. The series has $3 billion in principal outstanding and carries a 6.000% coupon, making the revised limit half of its principal. HSBC said the transaction is intended to manage its Tier 1 capital base.
Investors whose securities HSBC accepts will receive 100.50% of principal: $1,005 for each $1,000, plus interest accrued through the day before settlement. The offer has no minimum overall tender amount. A holder making a partial tender must offer at least $200,000 in $1,000 increments and retain at least $200,000 of the position.
If tenders exceed the $1.5 billion ceiling, HSBC may accept a proportionally reduced share from participating holders. The final purchase amount and any allocation will be set after expiry; securities accepted in the offer will be canceled and retired.
The offer expires at 5 p.m. ET on Nov. 19, with settlement expected Nov. 24 if conditions are met or waived. Holders may withdraw tenders until the deadline. Securities in the series are first callable on May 22, 2027, and every five years thereafter.
HSBC has linked the buyback to a separate $1.5 billion sale of 7.625% perpetual subordinated contingent convertible securities. The sale must close by Nov. 19 on terms reasonably satisfactory to the bank for the tender to go ahead. HSBC's issuance notice says it priced the new securities Nov. 5 and expects to issue them Nov. 13, subject to closing conditions. The tender announcement says HSBC expects to fund purchases with cash on hand.
