REG - HSBC Holdings PLC - Issuance of contingent convertible securities
13/06/2024 07:00
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RNS Number : 2469S HSBC Holdings PLC 13 June 2024
NOT FOR PUBLICATION OR DISTRIBUTION IN THE UNITED STATES
13 June 2024
HSBC HOLDINGS PLC
ISSUANCE OF PERPETUAL SUBORDINATED CONTINGENT CONVERTIBLE SECURITIES
On 14 June 2024 (the 'Issue Date'), HSBC Holdings plc (the 'Company') intends
to issue SGD1,500,000,000 5.250% Resettable Perpetual Subordinated Contingent
Convertible Securities (Callable During Any Optional Redemption Period (as
defined below)) (ISIN XS2764959842) (the 'Securities').
Application will be made for the Securities to be admitted to the Official
List and to trading on the Global Exchange Market (the 'GEM') of The Irish
Stock Exchange plc trading as Euronext Dublin ('Euronext Dublin') on or around
the Issue Date. The denominations of the Securities will be SGD250,000.
The Securities will be subject to the terms and conditions set out in the
offering memorandum dated 27 March 2024 relating to the Company's
US$50,000,000,000 Programme for Issuance of Perpetual Subordinated Contingent
Capital Securities and the supplement thereto dated 1 May 2024 (together, the
'Offering Memorandum').
This Hong Kong Regulatory Announcement is not an offer of Securities for sale
in the United States. The Securities may not be offered or sold in the United
States absent registration or an exemption from registration.
Subscription
Managers
The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch will
be the sole global coordinator and a joint bookrunner (the 'Sole Global
Coordinator and Joint Bookrunner').
DBS Bank Ltd., United Overseas Bank Limited, and Oversea-Chinese Banking
Corporation Limited will be joint bookrunners (together with the Sole Global
Coordinator and Joint Bookrunner, the 'Managers').
Subscription Agreement
The Company and the Managers have entered into a subscription agreement dated
12 June 2024 (the 'Issue Agreement Date') in relation to the Securities (the
'Subscription Agreement'). Pursuant to the Subscription Agreement and the
dealer agreement dated 2 September 2014 as last modified and restated by a
modified and restated dealer agreement dated 27 March 2024 (the 'Dealer
Agreement') made between the Company and HSBC Bank plc, subject to fulfilment
of the conditions set out below in the section headed 'Conditions precedent to
the subscription', the Managers have agreed jointly and severally to subscribe
for the Securities in immediately available funds, to be issued by the Company
on the Issue Date, being 14 June 2024, in an aggregate principal amount of
SGD1,500,000,000.
Pursuant to the terms of the Subscription Agreement and Dealer Agreement, the
Company has agreed to indemnify the several Managers against certain
liabilities in connection with the Securities.
Conditions precedent to the subscription
The Managers' obligations to subscribe for the Securities on the Issue Date
are subject to the satisfaction of a number of conditions, including:
(a) the receipt of (i) certain specified opinions of counsel to the Company
and counsel to the Managers, (ii) specified certificates of authorised
signatories of the Company, and (iii) a letter from the Company's independent
auditor;
(b) the truth and correctness in all material respects of certain
representations and warranties of the Company contained in the Dealer
Agreement on the Issue Agreement Date and on the Issue Date, in each case with
reference to the facts and circumstances then subsisting;
(c) there not having been any significant new factor, material mistake or
inaccuracy relating to the information contained in the Offering Memorandum,
information in respect of which would have been required to have been included
in the Offering Memorandum had the relevant significant new factor, material
mistake or inaccuracy arisen or been noted prior to the date of the Offering
Memorandum and which is material in the context of the issue of the
Securities;
(d) there having been, since the Issue Agreement Date, in the opinion of the
Managers (after such consultation with the Company as may be reasonably
practicable in the circumstances), no such change in national or international
financial, political or economic conditions or currency exchange rates as
would, in their view, be likely to prejudice materially the placement,
distribution or sale of the Securities or dealings in the Securities in the
secondary market; and
(e) the Securities being admitted to listing on the Official List of
Euronext Dublin and trading on its Global Exchange Market, subject only to the
issue of the Securities, on or before the Issue Date.
Such conditions may be waived in whole or in part by any Manager (except for
the Company's representation that the aggregate principal amount of the
Securities issued under the Programme will not exceed US$50,000,000,000 (or
such greater amount as may be permitted by the terms of the Dealer
Agreement)).
Subscribers
The Company intends to offer and sell the Securities to no less than six
independent placees (who will be independent individual, corporate and/or
institutional investors). To the best of the knowledge, information and belief
of the directors of the Company, save as described in the immediately
following sentence, each of the placees (and their respective ultimate
beneficial owners) will be third parties independent of the Company and are
not connected with the Company and its connected persons (as defined in the
Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited (the 'SEHK') (the 'Hong Kong Listing Rules')). Pursuant to a waiver
granted by the SEHK from strict compliance with certain requirements of the
Hong Kong Listing Rules (which waiver is described in an announcement by the
Company dated 10 January 2017 and which is available on the Company's
website), the Sole Global Coordinator and Joint Bookrunner and HSBC Bank plc
may hold Securities from time to time for the purposes of market-making
transactions.
Principal terms of the Securities
The principal terms of the Securities are summarised as follows:
Issuer The Company.
Securities offered SGD1,500,000,000 in aggregate principal amount.
Maturity date Perpetual.
Issue price 100% of the aggregate principal amount of the Securities.
Interest From (and including) the Issue Date to (but excluding) the first Reset Date
(as defined below) 5.250 % per annum (the 'Initial Rate of Interest'). From
(and including) each Reset Date to (but excluding) the next following Reset
Date, the applicable per annum interest rate (the 'Reset Rate of Interest')
will be equal to the sum of the SORA-OIS Rate (as determined in accordance
with the provisions below) and 2.237%.
Reset Date The Resettable Security Interest Payment Date (as defined below) falling on 14
December 2029 and 14 December 2034, and thereafter each Resettable Security
Interest Payment Date falling on 14 December in each year falling five years
after the immediately preceding Reset Date (each such date, a 'Reset Date').
Each period from (and including) a Reset Date to (but excluding) the following
Reset Date will be a 'Reset Period'.
Resettable Security Interest Payment Dates 14 June and 14 December in each year commencing on 14 December 2024.
Reset Determination Dates The second business day immediately preceding a Reset Date (each, a 'Reset
Determination Date').
SORA-OIS Rate The Calculation Agent will, in respect of each Reset Period, determine the
five-year SORA-OIS reference rate available on the 'OTC SGD OIS' page on
Bloomberg under 'BGN' appearing under the column headed 'Ask' (or such other
substitute page thereof or if there is no substitute page, the screen page
which is the generally accepted page used by market participants at that time
as determined by an independent financial institution (which is appointed by
the Company and notified to the Calculation Agent)) (the 'Relevant SORA-OIS
Screen Page') at the close of business on the relevant Reset Determination
Date (such rate, the 'SORA-OIS Rate'), and the Reset Rate of Interest for the
relevant Reset Period shall be the sum of the SORA-OIS Rate as determined in
accordance with the above provisions and 2.237%, with such sum converted (if
necessary) in line with market convention to a basis (e.g. annual,
semi-annual, quarterly) equivalent to the frequency with which scheduled
interest payments are payable on the Notes during the relevant Reset Period,
all as determined by the Calculation Agent; provided, however, that if the
Relevant SORA-OIS Screen Page is not available or such rate does not appear on
the Relevant SORA-OIS Screen Page on the relevant Reset Determination Date,
the Reset Rate of Interest (as applicable) shall be determined to be the rate
of interest as at the last preceding Reset Date or, in the case of the first
Reset Determination Date, the Reset Rate of Interest shall be the Initial Rate
of Interest.
Notwithstanding the above provisions, if the Company (in consultation, to the
extent practicable, with the Calculation Agent) determines that a Benchmark
Event (as defined in the terms and conditions of the Securities (the
'Conditions')) has occurred in relation to an Original Reference Rate when any
interest rate (or the relevant component part thereof) remains to be
determined by reference to that Original Reference Rate, then a number of
fallback provisions apply, as set out in the Conditions, including the
potential determination by an Independent Adviser (as defined below) or by the
Company (in consultation, to the extent practicable, with the Calculation
Agent and acting in good faith and in a commercially reasonable manner) of a
successor rate or alternative reference rate for determining the Reset Rate of
Interest.
'Original Reference Rate' means (A) the SORA-OIS Rate (or any component
part(s) thereof) or (B) (if applicable) any other successor rate or
alternative reference rate (or any component part(s) thereof) determined and
applicable to the Securities pursuant to the earlier operation of the
above-mentioned fallback provisions.
Discretionary interest payments The Company shall be entitled at its full discretion to cancel (in whole or in
part) any amounts of
interest otherwise payable in respect of the Securities on any date (the
'Discretionary Interest Payment Right').
Restriction on interest payments In addition to the Discretionary Interest Payment Right, the terms of the
Securities restrict the Company from making interest payments in certain
circumstances, including where the Company's distributable items or the
maximum distributable amount that is applicable to the Company is exceeded,
the Company would not be solvent at the time of such interest payment, or the
Lead Regulator (as defined below) orders the Company to cancel (in whole or in
part) the interest otherwise payable on such interest payment date, in which
case Company shall cancel (in whole or, as the case may be, in part) the
interest otherwise payable on such date.
Optional redemption The Securities will not be redeemable at the option of the holders of the
Securities (the 'Securityholders') at any time.
Subject to certain conditions described in the Conditions, the Securities may
be redeemed in whole (but not in part) at the Company's option in its sole
discretion on any business day during an Optional Redemption Period (as
defined below), on giving not less than 10 nor more than 60 days' notice to
the Securityholders, at a redemption price equal to 100% of the principal
amount, together with (to the extent not cancelled pursuant to the terms and
conditions of the Securities (the 'Conditions')) interest accrued and unpaid
thereon, if any, to the date fixed for redemption.
'Optional Redemption Period' means each period commencing on (and including)
the date falling six months prior to a Reset Date, and ending on (and
including) such Reset Date.
Special event redemption Subject to certain conditions described in the Conditions, the Securities may
be redeemed in whole (but not in part) at the option of the Company in its
sole discretion upon the occurrence of a Tax Event or a Capital
Disqualification Event. In each case, the redemption price for the Securities
will be equal to 100% of their principal amount, together with (to the extent
not cancelled pursuant to the Conditions) interest accrued and unpaid thereon,
if any, to the date fixed for redemption.
A 'Tax Event' will be deemed to have occurred with respect to the Securities
if at any time the Company determines that certain tax events have occurred
(as specified in the Conditions).
A 'Capital Disqualification Event' will be deemed to have occurred if the
Company determines, at any time after the Issue Date, there is a change in the
regulatory classification of the Securities that results in or will result in
their (i) exclusion in whole or in part from the regulatory capital of the
Company together with its consolidated subsidiaries (the 'HSBC Group') (other
than as a consequence of a conversion of the Securities following the
occurrence of a Capital Adequacy Trigger); or (ii) reclassification in whole
or in part as a form of the HSBC Group's regulatory capital that is lower than
additional tier 1 capital.
Capital Adequacy Trigger A 'Capital Adequacy Trigger' will occur if at any time the Common Equity Tier
1 Capital Ratio of
the HSBC Group is below 7.00%.
Whether a Capital Adequacy Trigger has occurred at any time shall be
determined by the Company, the Lead Regulator or any agent of the Lead
Regulator appointed for such purpose by the Lead Regulator.
'Applicable Rules' means, at any time, the laws, regulations, requirements,
guidelines and policies relating to capital adequacy (including, without
limitation, as to leverage) then in effect in the UK including, without
limitation to the generality of the foregoing, the UK CRR, the Banking Act and
any regulations, requirements, guidelines and policies relating to capital
adequacy adopted by the Lead Regulator from time to time (whether or not such
requirements, guidelines or policies are applied generally or specifically to
the Company or to the Company and any holding or subsidiary company of the
Company or any subsidiary of any such holding company), in each case as
amended, supplemented or replaced from time to time.
'Banking Act' means the Banking Act 2009, as amended.
'CET1 Capital' means, as at any date the sum, expressed in U.S. dollars of all
amounts that constitute Common Equity Tier 1 Capital of the HSBC Group as at
such date, less any deductions from Common Equity Tier 1 Capital of the HSBC
Group required to be made as of such date, in each case as calculated by the
Company on a consolidated basis and without applying the transitional
provisions set out in Part 10 of the UK CRR (or in any successor provisions
thereto or any equivalent provisions of the Applicable Rules which replace or
supersede such provisions) in accordance with the Applicable Rules applicable
to the Company as at such date (which calculation shall be binding on the
trustee and the Securityholders).
'Common Equity Tier 1 Capital' has the meaning given to it in the Applicable
Rules as interpreted and applied in accordance with the Applicable Rules then
applicable to the HSBC Group or by the Lead Regulator.
'Common Equity Tier 1 Capital Ratio means, as at any date, the ratio of the
CET1 Capital as at such date to the Risk Weighted Assets as at the same date,
expressed as a percentage and on the basis that all measures used in such
calculation shall be calculated without applying the transitional provisions
set out in Part 10 of the UK CRR (or in any successor provisions thereto or
any equivalent provisions of the Applicable Rules which replace or supersede
such provisions).
'Lead Regulator' means the Prudential Regulation Authority or any successor or
other entity primarily responsible for the prudential supervision of the
Company.
'Risk Weighted Assets' means, as of any date, the aggregate amount, expressed
in US Dollars, of the risk weighted assets of the HSBC Group as of such date,
as calculated by the Company on a consolidated basis and without applying the
transitional provisions set out in Part 10 of the UK CRR (or in any successor
provisions thereto or any equivalent provisions of the Applicable Rules which
replace or supersede such provisions), in accordance with the Applicable Rules
applicable to the HSBC Group as of such date (which calculations shall be
binding on the trustee and the
Securityholders) and where the term 'risk weighted assets' means the risk
weighted assets or total risk exposure amount, as calculated by the Company in
accordance with the Applicable Rules applicable to the HSBC Group as of such
date.
'UK CRR' means Regulation (EU) No. 575/2013 on prudential requirements for
credit institutions and investment firms of the European Parliament and of the
Council of 26 June 2013, as amended or supplemented, as it forms part of
domestic law in the UK by virtue of the European Union (Withdrawal) Act 2018,
as amended (the 'EUWA').
Conversion upon a Capital Adequacy Trigger If a Capital Adequacy Trigger occurs:
i. the Securities shall be irrevocably discharged and satisfied by its
conversion into Ordinary Shares, credited as fully paid, in the manner and in
the circumstances described in the Conditions, and the issuance and delivery
of such Ordinary Shares to the Settlement Shares Depositary;
ii. such conversion shall occur without delay upon the occurrence of
such Capital Adequacy Trigger and, in any event, within one month from the
time it is determined that the Capital Adequacy Trigger has occurred or within
such shorter period as the Lead Regulator may require (such date on which
conversion is to occur is the 'Conversion Date'); and
iii. the Securities will be converted in whole and not in part on the
Conversion Date, at which point all of the Company's obligations under the
Securities shall be irrevocably discharged and satisfied by the Company's
issuance and delivery of the relevant Ordinary shares to the Settlement Shares
Depositary on the Conversion Date.
The Securities will not be convertible into Ordinary Shares at the option of
the Securityholders at any time.
'Ordinary Shares' means fully paid ordinary shares in the capital of the
Company.
'Settlement Shares Depositary' means a reputable financial institution, trust
company or similar entity (which in each such case is wholly independent of
the Company) to be appointed by the Company on or prior to any date when a
function ascribed to the Settlement Shares Depositary in the Conditions is
required to be performed and which will hold the Ordinary Shares (and any
Alternative Consideration, if applicable) on trust for Securityholders in one
or more segregated accounts, unless otherwise required to be transferred out
of such accounts for the purposes of a Conversion Shares Offer, and otherwise
on terms consistent with the Conditions.
Ordinary Shares and Conversion Price The Company shall issue and deliver to the Settlement Shares Depositary on the
Conversion Date a number of Ordinary Shares in respect of a Security
determined by dividing the principal amount of such Security by the Conversion
Price, subject to rounding and fractional adjustments set out in the
Conditions.
The 'Conversion Price' is fixed initially at SGD4.6481 per Ordinary Share and
is subject to certain anti-dilution adjustments as described below.
Assuming that there is no adjustment to the Conversion Price, the maximum
number of Ordinary Shares that may be issued upon an Automatic Conversion of
the Securities is approximately 322,712,506.
Ranking of Conversion Shares The Ordinary Shares issued and delivered on conversion will be fully paid and
non-assessable and
will in all respects rank pari passu with the fully paid Ordinary Shares in
issue on the Conversion Date, except in any such case for any right excluded
by mandatory provisions of applicable law, and except that any Ordinary Shares
so issued and delivered will not rank for (or, as the case may be, the
relevant Securityholder shall not be entitled to receive) any rights,
distributions or payments the record date or other due date for the
establishment of entitlement for which falls prior to the Conversion Date.
Conversion Shares Offer The Company may elect, at its sole and absolute discretion and following the
conversion upon a Capital Adequacy Trigger (as described above), that the
Settlement Shares Depositary (or an agent on its behalf) will make an offer
of, in the Company's sole and absolute discretion, all or some of the Ordinary
Shares to be delivered on conversion to, in the Company's sole and absolute
discretion, all or some of the Company's Shareholders at such time, such offer
to be at a cash price per Ordinary Share equal to the Conversion Shares Offer
Price, in accordance with the following provisions, subject to certain
conditions (a 'Conversion Shares Offer').
The 'Conversion Shares Offer Price' is fixed initially at £2.70 per
Conversion Share and is subject to certain anti-dilution adjustments as
described below.
On the Issue Date, the Conversion Shares Offer Price and the Conversion Price
will be equal (based on an exchange rate of £1.00 = SGD1.7215).
Conversion Shares Offer consideration Upon expiry of the Conversion Shares Offer period, the Settlement Shares
Depositary will provide notice to the Securityholders of the composition of
the Alternative Consideration (and of the deductions to the cash component, if
any, of the Alternative Consideration (as set out in the definition of
Alternative Consideration)). The Alternative Consideration shall be held on
trust by the Settlement Shares Depositary for the Securityholders.
'Alternative Consideration' means, in respect of each Security and as
determined by the Company:
(a) if all of the Ordinary Shares to be issued and delivered on conversion are
sold in the Conversion Shares Offer, the pro rata share of the cash proceeds
from the sale of such Ordinary Shares attributable to such Security
(converted, if necessary, into Singapore Dollars at a prevailing exchange rate
pursuant to the Conditions) as determined by the Settlement Shares Depositary,
and less the pro rata share of any foreign exchange transaction costs and an
amount equal to the pro rata share of any taxes or duties (including, without
limitation, any capital, stamp, issue and registration and transfer taxes or
duties) that may arise or be paid in connection with the issue and delivery of
Ordinary Shares to the Settlement Shares Depositary pursuant to the Conversion
Shares Offer;
(b) if some, but not all of such Ordinary Shares to be issued and delivered
upon conversion are sold in the Conversion Shares Offer, (x) the pro rata
share of the cash proceeds from the sale of such Ordinary Shares attributable
to such Security (converted, if necessary, into Singapore dollars at a
prevailing exchange rate pursuant to the Conditions) as determined by the
Settlement Shares Depositary, and less the pro rata share of any foreign
exchange transaction costs and an amount equal to the pro rata share of any
taxes or duties (including, without limitation, any capital, stamp, issue and
registration and transfer taxes or duties) that may arise or be paid in
connection with the issue and delivery of Ordinary Shares to the Settlement
Shares Depositary pursuant to the Conversion Shares Offer and (y) the pro rata
share of such Ordinary Shares not sold pursuant to the Conversion Shares Offer
attributable to such Security rounded down to the nearest whole number of
Ordinary Shares; and
(c) if no Ordinary Shares are sold in the Conversion Shares Offer, the
relevant number of Ordinary Shares which would have been received had the
Company not elected that the Settlement Shares Depositary should carry out a
Conversion Shares Offer.
Adjustments to the Conversion Price and the Conversion Shares Offer Price The Conversion Price and Conversion Shares Offer Price will be adjusted upon
the occurrence of the following events: (i) a consolidation, reclassification,
redesignation or subdivision in relation to the Ordinary Shares, (ii) an
issuance of Ordinary Shares in certain circumstances by way of capitalisation
of profits or reserves, (iii) an Extraordinary Dividend (as defined in the
Conditions), (iv) an issue of Ordinary Shares to shareholders as a class by
way of rights or (v) a Qualifying Relevant Event (as defined in the
Conditions), in each case only in the situations and to the extent provided in
the Conditions.
Adjustments are not required for every corporate or other event that may
affect the market price of the Conversion Shares and an Independent Adviser
may make modifications as it determines to be appropriate.
'Independent Adviser' means an independent financial institution of
international repute or other independent financial adviser experienced in the
international capital markets, in each case appointed by the Company at its
own expense.
Transfers after Suspension Date Transfers of beneficial interests in the Securities where such Securities are
represented by a global registered security will not be registered by the
clearing systems after the date specified as the 'Suspension Date' in a notice
given by the Company to holders of Securities after the occurrence of a
Capital Adequacy Trigger.
Form of Securities The Securities will be represented by a global registered security which is
exchangeable for definitive registered securities in the limited circumstances
specified in such global registered security. The Securities will be
registered in the name of a nominee for the common depositary for Euroclear
Bank SA/NV and Clearstream Banking S.A. and the global registered security
will be deposited on or about the Issue Date with the common depositary.
Status The Securities constitute direct, unsecured obligations of the Company ranking
pari passu without any preference among themselves. The rights and claims of
the Securityholders are subordinated in the event of the winding-up of the
Company in England to the Prior Ranking Creditors and as described in the
Conditions.
'Prior Ranking Creditors' means the creditors of the Company (a) who are
unsubordinated creditors, or (b) whose claims are, or are expressed to be
subordinated to the claims of unsubordinated creditors but not further or
otherwise, or (c) whose claims are, or are expressed to be, junior to the
claims of other creditors of the Company, whether subordinated or
unsubordinated, other than those whose claims rank or are expressed to rank
pari passu with, or junior to, the claims of the Securityholders in a
winding-up occurring prior to the Capital Adequacy Trigger and includes
creditors in respect of (i) the principal and interest in respect of the
Existing Subordinated Eurobonds (as such term is defined in the Conditions)
and (ii) the principal and interest in respect of any Subordinated Notes (as
such term is defined in the Conditions).
Listing Application will be made to admit the Securities to the Official List of the
Irish Stock Exchange and to trading on the GEM on or around the Issue Date. No
assurance can be given as to whether or not, or when, such application will be
granted. The GEM is not a regulated market for the purposes of the Directive
2014/65/EU (as amended, 'MiFID II') or Regulation (EU) No 600/2014 as it forms
part of UK domestic law by virtue of the EUWA.
Calculation Agent HSBC Bank plc, or its successor appointed by the Company, pursuant to a
calculation agent agreement expected to be entered into on the Issue Date (the
'Calculation Agent').
Minimum Denominations The Securities will be issued only in registered form in minimum denominations
of SGD250,000.
Business Day A day on which commercial banks and foreign exchange markets settle payments
and are open for general business (including dealings in foreign exchange and
foreign currency deposits) in London, Singapore, New York and Hong Kong.
Governing Law and Jurisdiction The trust deed relating to the Securities (the 'Trust Deed') and the
Securities, and any non-contractual obligations arising out of or in
connection with the Trust Deed and the Securities, shall be governed by, and
construed in accordance with, English law. The courts of England have
exclusive jurisdiction to settle any dispute arising from or connected with
the Securities (including any non-contractual obligations arising out of or in
connection with the Securities).
Waiver granted by the SEHK and specific mandate for the issuance of the
Securities
The Company announced on 20 March 2024 that it had applied for, and the SEHK
had granted, a waiver from strict compliance with the requirements of Rule
13.36(1) of the Hong Kong Listing Rules pursuant to which the Company was
permitted to seek (and, if approved, to utilise) an authority (the 'Mandate')
to issue Contingent Convertible Securities ('CCSs') (and to allot Ordinary
Shares into which they may be converted or exchanged) in excess of the limit
of the general mandate of 20% of the Company's issued share capital.
At the 2024 annual general meeting of the Company held on 3 May 2024, the
shareholders of the Company approved the Mandate allowing the Company to allot
Ordinary Shares or grant rights to subscribe for, or to convert any security
into, Ordinary Shares in connection with the issue of CCSs up to an aggregate
nominal amount of US$1,905,105,226, equivalent to approximately 20% of the
Company's issued ordinary share capital as at 7 March 2024, without first
offering them to existing shareholders. The Mandate is effective until the
Company's annual general meeting in 2025 or the close of business on 30 June
2025, whichever is the earlier, and is in addition to any general mandate
granted by the shareholders at any annual general meeting of the Company to
allot Ordinary Shares (for example, at the 2024 annual general meeting, the
Company sought, and received from shareholders, a separate authority to allot
new Ordinary Shares (or rights to Ordinary Shares) of up to an aggregate
nominal amount of US$6,350,350,753, representing approximately two-thirds of
the Company's issued ordinary share capital in total as at 7 March 2024,
subject to certain limitations as described in the notice of the 2024 annual
general meeting of the Company dated 22 March 2024 (the 'AGM Notice')). For
further details, please refer to the AGM Notice and the announcement of the
Company dated 3 May 2024 disclosing the poll results of such meeting.
As of the date of this announcement, no CCSs convertible into Ordinary Shares
and covered by the Mandate have been issued by the Company. Accordingly, there
is remaining headroom under the Mandate of US$1,905,105,226 in nominal amount
of Ordinary Shares. Assuming that there is no adjustment to the Conversion
Price for the Securities, the aggregate nominal amount of the Ordinary Shares
which may be issued upon conversion of all the Securities is US$161,356,253.
Accordingly, the Securities are being issued pursuant to and out of the
Mandate and the issuance of the Securities is not subject to approval by the
shareholders of the Company.
Application for listing
If a Capital Adequacy Trigger occurs, and Ordinary Shares are issued pursuant
to the conversion of the Securities, application will be made by the Company
to (i) the UK Financial Conduct Authority and to the London Stock Exchange for
the Ordinary Shares to be admitted to the Official List and to trading
respectively, (ii) the SEHK for the listing of, and permission to deal in, the
Ordinary Shares, and (iii) the New York and Bermuda stock exchanges for
listing of the Ordinary Shares.
Reasons for the issuance of the Securities and use of proceeds
The Company intends to use the net proceeds from the sale of the Securities
for general corporate purposes and to maintain and further strengthen the
Company's capital base pursuant to requirements under the UK CRR.
The aggregate gross proceeds from the issuance of the Securities are expected
to be SGD1,500,000,000. The net proceeds from the issuance of the Securities,
after the deduction of the commission to the Managers, are expected to be
SGD1,485,000,000.
Fund raising activities in the past 12 months
The Company has not carried out any issue of equity securities during the 12
months immediately preceding the date of this announcement, save and except
for the Issuances of Ordinary Shares to Employees.
For these purposes, 'Issuances of Ordinary Shares to Employees' means the
issuances by the Company of Ordinary Shares to certain of its directors and
employees pursuant to or in connection with the grant of share awards, share
option schemes, or share saving schemes of the Company.
Effects on shareholding structure of the Company
In the event a Capital Adequacy Trigger occurs, assuming full conversion of
the Securities at the initial Conversion Price takes place, the Securities
will be convertible into approximately 322,712,506 Ordinary Shares
representing, as at 6 June 2024, approximately 1.72% of the issued share
capital of the Company and approximately 1.70% of the issued share capital of
the Company as enlarged by the issue of such Conversion Shares.
The Conversion Shares issued upon conversion of the Securities will in all
respects rank pari passu with the fully paid Ordinary Shares in issue on the
Conversion Date, except in any such case for any right excluded by mandatory
provisions of applicable law, and except that any Ordinary Shares so issued
and delivered will not rank for (or, as the case may be, the relevant
Securityholder shall not be entitled to receive) any rights, distributions or
payments the record date or other due date for the establishment of
entitlement for which falls prior to the Conversion Date.
The following table summarises the potential effects on the shareholding
structure of the Company as a result of the issuance of the Securities (by
reference to the information on shareholdings as at 6 June 2024 (being the
latest practicable date prior to the release of this announcement) and
assuming full conversion of the Securities):
Assuming the Securities are fully converted into Ordinary Shares at the
initial Conversion Price
As at 6 June 2024 (Note1)
Name of Shareholders Number of Ordinary Shares % of total issued Ordinary Shares Number of Ordinary Shares % of the enlarged issued Ordinary Shares
Subscribers of the Securities 0 0.00% 322,712,506 1.70%
Other public Shareholders 18,713,176,856 100.00% 18,713,176,856 98.30%
Total Issued Ordinary Shares 18,713,176,856 100.00% 19,035,889,362 100.00%
Note:
1. The information in the above table is for illustrative purposes
only, and it only shows the potential effects on the shareholding structure of
the Company in connection with the Securities (but not any other securities
issued or to be issued by the Company). The number of Ordinary Shares shown
for holders of the Securities relates only to those Ordinary Shares that are
or will be held by them as a result of their holding the Securities.
Investor enquiries to:
Greg Case +44 (0) 20 7992 3825 investorrelations@hsbc.com
Media enquiries to:
Press Office +44 (0) 20 7991 8096 pressoffice@hsbc.com
Disclaimers
The distribution of this announcement in certain jurisdictions may be
restricted by law. Persons into whose possession this announcement comes are
required to inform themselves about and to observe any such restrictions.
This announcement does not constitute an offer or an invitation to subscribe
or purchase any of the Securities. No action has been taken in any
jurisdiction to permit a public offering of the Securities where such action
is required. The offer and sale of the Securities may be restricted by law in
certain jurisdictions.
The Securities are not deposit liabilities of the Company and are not covered
by the United Kingdom Financial Services Compensation Scheme or insured by the
U.S. Federal Deposit Insurance Corporation or any other governmental agency of
the United Kingdom, the United States or any other jurisdiction.
The Securities have not been and will not be registered under the U.S.
Securities Act of 1933, as amended (the 'Securities Act') and may not be
offered, sold or delivered within the United States or to, or for the account
or benefit of, U.S. persons, as defined in Regulation S under the Securities
Act, except pursuant to an exemption from or in a transaction not subject to
the registration requirements under the Securities Act.
The Securities are complex financial instruments. They are not a suitable or
appropriate investment for all investors, especially retail investors. In some
jurisdictions, regulatory authorities have adopted or published laws,
regulations or guidance with respect to the offer or sale of securities such
as the Securities. Potential investors in the Securities should inform
themselves of, and comply with, any applicable laws, regulations or regulatory
guidance with respect to any resale of the Securities (or any beneficial
interests therein).
a. In the UK, the Financial Conduct Authority ('FCA') Conduct of
Business Sourcebook ('COBS') requires, in summary, that the Securities should
not be offered or sold to retail clients (as defined in COBS 3.4 and each a
'retail client') in the UK.
b. By purchasing, or making or accepting an offer to purchase,
any Securities (or a beneficial interest in such Securities) from the Company
and/or the Managers, each prospective investor represents, warrants, agrees
with and undertakes to the Company and the Managers that:
i. it is not a retail client in the UK; and
ii. it will not (A) sell or offer the Securities (or any beneficial
interests therein) to retail clients in the UK or (B) communicate (including
the distribution of the Offering Memorandum) or approve an invitation or
inducement to participate in, acquire or underwrite the Securities (or any
beneficial interests therein) where that invitation or inducement is addressed
to or disseminated in such a way that it is likely to be received by a retail
client in the UK.
For the avoidance of doubt, the obligations above are without prejudice to the
need to comply at all times with all applicable laws, regulations and
regulatory guidance (whether inside or outside the European Economic Area (the
'EEA') or the UK) relating to the promotion, offering, distribution and/or
sale of the Securities (or any beneficial interests therein), whether or not
specifically mentioned in the Offering Memorandum (including (without
limitation) any requirements under MiFID II or the FCA Handbook as to
determining the appropriateness and/or suitability of an investment in the
Securities (or any beneficial interests therein) for investors in any relevant
jurisdiction).
Where acting as agent on behalf of a disclosed or undisclosed client when
purchasing, or making or accepting an offer to purchase, any Securities (or
any beneficial interests therein) from the Company and/or the Managers the
foregoing representations, warranties, agreements and undertakings will be
given by and be binding upon both the agent and its underlying client.
PRIIPS Regulation-Prohibition of sales to EEA retail investors - The
Securities are not intended to be offered, sold or otherwise made available to
and should not be offered, sold or otherwise made available to any retail
investor in the EEA. For these purposes, a retail investor means a person who
is one (or more) of: (i) a retail client as defined in point (11) of Article
4(1) of MiFID II; or (ii) a customer within the meaning of Directive (EU)
2016/97, where that customer would not qualify as a professional client as
defined in point (10) of Article 4(1) of MiFID II. Consequently, no key
information document required by Regulation (EU) No 1286/2014 (as amended, the
'PRIIPs Regulation') for offering or selling the Securities or otherwise
making them available to retail investors in the EEA has been prepared and
therefore offering or selling the Securities or otherwise making them
available to any retail investor in the EEA may be unlawful under the PRIIPs
Regulation.
UK PRIIPS Regulation-Prohibition of sales to UK retail investors - The
Securities are not intended to be offered, sold or otherwise made available to
and should not be offered, sold or otherwise made available to any retail
investor in the UK. For these purposes, a retail investor means a person who
is one (or more) of: (i) a retail client as defined in point (8) of Article 2
of Regulation (EU) No 2017/565 as it forms part of UK domestic law by virtue
of the EUWA; or (ii) a customer within the meaning of the provisions of the
Financial Services and Markets Act 2000, as amended (the 'FSMA') and any rules
or regulations made under the FSMA to implement Directive (EU) 2016/97, where
that customer would not qualify as a professional client, as defined in point
(8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of UK
domestic law by virtue of the EUWA. Consequently, no key information document
required by the Regulation (EU) No 1286/2014 as it forms part of UK domestic
law by virtue of the EUWA (the 'UK PRIIPs Regulation') for offering or selling
the Securities or otherwise making them available to retail investors in the
UK has been prepared and therefore offering or selling the Securities or
otherwise making them available to any retail investor in the UK may be
unlawful under the UK PRIIPs Regulation.
For and on behalf of
HSBC Holdings plc
Aileen Taylor
Group Company Secretary and Chief Governance Officer
Notes to editors:
HSBC Holdings plc
HSBC Holdings plc, the parent company of HSBC, is headquartered in London.
HSBC serves customers worldwide from offices in 62 countries and territories.
With assets of US$3,001 bn at 31 March 2024, HSBC is one of the world's
largest banking and financial services organisations.
ends/all
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