HSBC to raise US$1.5 billion in perpetual convertible bonds as it gears up for loan growth
HSBC Holdings plans to issue a total of US$1.5 billion in perpetual bonds, the third round of fundraising since June, in anticipation of rising demand for loans.
The subordinated contingent convertible securities will be issued on Thursday and carry an interest rate of 6.95 per cent a year, according to a filing to the Hong Kong stock exchange on Tuesday.
“The company intends to use the net proceeds from the sale of the securities for general corporate purposes and to maintain or further strengthen its capital base pursuant to requirements under the capital instruments regulations,” HSBC said.
HSBC raised US$2.5 billion in September via the same instrument at a similar interest rate and another S$1.5 billion (US$1.12 billion) in June at 5.25 per cent a year.
“HSBC is preparing for rising demand for loans this year,” said Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators. “The HSBC bonds will be popular with investors as the pricing is attractive and the securities can also be converted into shares.”
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