HSBC in $2.45 Billion SEC-registered CRD IV Additional Tier 1 Offering

March 30, 2015

Cleary represented HSBC in an SEC-registered offering of $2.45 billion perpetual subordinated contingent convertible securities. The offering, a takedown from HSBC Holdings’ shelf registration statement, closed on March 30, 2015.

The securities constitute additional Tier 1 capital under the new European CRD IV capital regulations. The principal amount will be written down and converted to equity if HSBC Holdings’ CRD IV common equity tier 1 capital ratio falls below 7%. The securities have no fixed maturity date. The securities bear a fixed interest rate of 6.375% per annum for the first 10 years, after which the rate will be reset. Interest payments are subject to cancellation at HSBC Holdings’ discretion and to mandatory cancellation under certain circumstances. The securities are callable by HSBC Holdings in March 2025 and every five years thereafter. The securities are also subject to redemption at HSBC Holdings’ discretion upon the occurrence of certain tax and regulatory events. The securities are listed on the Irish Stock Exchange.

HSBC Holdings is one of the largest banking and financial services organizations in the world, with an international network of over 6,100 offices in 73 countries and territories in five geographical regions: Europe; Asia; the Middle East and North Africa; North America and Latin America. Within these regions, a comprehensive range of banking and related financial services is offered to personal, commercial, corporate, institutional, investment and private banking clients.