HSBC aims to raise €1.5b in convertible bond issue

HSBC Holdings plans to issue a perpetual subordinated convertible bond in a bid to raise €1.5 billion (HK$15 billion) to further strengthen its capital base.

The bond will pay a coupon rate of 5.25 per cent and be converted into ordinary shares if the bank’s tier-one capital ratio drops below 7 per cent, HSBC said in a filing to the Hong Kong stock exchange on Tuesday morning.

The bank on Sunday announced it would issue two perpetual subordinated convertible bonds to raise a combined US$3.75 billion. It will issue US$2.25 billion worth of bonds paying an annual coupon rate of 6.375 per cent, while US$1.5 billion will be offered at 5.625 per cent.