HSBC (0005) announced on Tuesday that it plans to issue US$1.5 billion (HK$11.7 billion) of 6.75 percent perpetual subordinated contingent convertible securities on May 18 for general corporate purposes and to maintain or further strengthen its capital base.
The net proceeds are expected to be US$1.49 billion. HSBC's shares opened flat at HK$141.2, but later dropped 1.84 percent to HK$138.6.
Its filing said the securities are expected to be admitted to the official list and to trading on the global exchange market of The Irish Stock Exchange plc, trading as Euronext Dublin, within 30 days of the issue date. The denominations of the securities will be US$200,000 and integral multiples of US$1,000 in excess thereof.
It also said that the 'Conversion Price' is fixed initially at US$3.6779 per conversion 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 407 million, representing around 2.32 percent of the issued share capital of the company as enlarged by the issue of such conversion shares.
