June 1, 2017 / 1:40 AM / 3 months ago

HSBC Holdings markets Singapore dollar AT1 bonds at 5% area

SINGAPORE, June 1 (IFR) - HSBC Holdings is marketing its first Singapore dollar Additional Tier 1 issue with yield guidance in the 5 percent area.

The bank is seeking a benchmark size for the Reg S perpetual non-call five contingent convertible securities.

The notes are junior to all unsubordinated and subordinated obligations, and will count towards its Tier 1 capital under Basel III rules. The bonds convert to equity if the issuer’s common equity Tier 1 ratio falls below 7 percent.

The notes are expected to be rated Baa3/BBB (Moody’s/Fitch) while the issuer is A1/A/AA-.

Proceeds will be used for general corporate purposes and to strengthen the issuer’s capital base.

HSBC is sole structurer and sole bookrunner, as well as joint lead manager with DBS and UOB. ICBC Singapore and Maybank are co-managers. (Reporting by Kit Yin Boey; Editing by Vincent Baby and Daniel Stanton)

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