HSBC intends to raise up to $1.5 billion in Tier 1 bonds

By Scott Murdoch

SYDNEY, Feb 28 (Reuters) – HSBC Holdings is seeking to raise up to $1.5 billion in an additional Tier 1 perpetual bond, according to a source with direct knowledge of the matter.

The 5.5-year perpetual bond was launched on Tuesday, according to a term sheet seen by Reuters, but it did not specify how much the bank intends to raise.

HSBC declined to comment.

The indicative initial bond coupon price is 8.5%, according to the term sheet. The final fixed rate could change depending on investor demand.

HSBC said in an internal memo that it intended to use the funds raised to refinance part of the debt, for general business purposes and to strengthen its capital base.

HSBC is the only intermediary in the operation, which will close on Tuesday.

(Reporting by Scott Murdoch in Sydney; Editing by Jacqueline Wong and Tom Hogue, Spanish editing by José Muñoz in the Gdańsk newsroom)