HSBC Finance Corporation (“HSBC Finance”) hereby announces its
offer to purchase for cash up to U.S.$1,104,230,000 (the “Tender
Cap”) of its outstanding 6.676% Senior Subordinated Notes due
January 15, 2021 (CUSIP: 40429CGD8, 40429CGB2 and U4428DCD4; ISIN:
US40429CGD83, US40429CGB28 and USU4428DCD40) (the “Notes”), from
holders thereof (each, a “Holder” and collectively, the “Holders”),
at the price set forth in the table below, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated
September 5, 2017 (as it may be amended or supplemented from time
to time, the “Offer to Purchase”) and in the related Letter of
Transmittal dated September 5, 2017 (as it may be amended or
supplemented from time to time, the “Letter of Transmittal” and,
together with the Offer to Purchase, the “Offer Documents”), which
together constitute the Offer (the “Offer”).
In connection with the Offer, on September 5, 2017, HSBC Finance
entered into a definitive agreement with its ultimate parent, HSBC
Holdings plc (“HSBC Holdings”) pursuant to which HSBC Finance has
agreed to repurchase, subject to the terms and conditions contained
therein, U.S.$730,770,000 of Notes (the “Repurchase”), representing
all of the outstanding Notes held by HSBC Holdings. The Notes
purchased by HSBC Finance in the Repurchase will be in addition to
those accepted for purchase in the Offer and will not count toward
the Tender Cap. The purchase price for each U.S.$1,000 principal
amount of Notes repurchased pursuant to the Repurchase will be
equal to (x) if the Offer is consummated, the Total Consideration
(as defined in the Offer to Purchase) for each U.S.$1,000 principal
amount of Notes or (y) if the Offer is not consummated, (A) a price
based on the average trading price for the Notes over the five (5)
Business Day (as defined in the Offer to Purchase) period prior to
a settlement date specified in the Repurchase Agreement, or (B) if
the average trading price is not available for any reason, a price
calculated by HSBC Securities (USA) Inc. (using commercially
reasonable methods applicable to transactions similar to the
Repurchase) and agreed upon by HSBC Finance and HSBC Holdings.
Subject to the terms and conditions set forth in the Offer
Documents, HSBC Finance will pay each Holder that validly tenders
its Notes on or prior to 5:00 p.m. New York City time on September
18, 2017 (as such time and date may be extended by HSBC Finance in
its sole discretion, the “Early Tender Date”) and does not validly
withdraw its tender on or prior to the Withdrawal Date (as defined
herein) an amount in cash in U.S. dollars equal to the Total
Consideration and Accrued Interest (as defined herein). The “Total
Consideration” for each U.S.$1,000 principal amount of Notes is
equal to an amount that will reflect, as of the Price Determination
Time (as defined in the Offer to Purchase), a yield to the maturity
date of the Notes equal to the sum of (i) the bid-side yield on the
Reference U.S. Treasury Security set forth in the table below, as
reported on the Bloomberg Reference Page set forth in the table
below (the “Reference Yield”); plus (ii) the Fixed Spread set forth
in the table below, such price being rounded to the nearest
U.S.$0.01 per U.S.$1,000 principal amount of Notes. The Total
Consideration includes an early tender premium (the “Early Tender
Premium”) of U.S.$30 per U.S.$1,000 principal amount of Notes.
Holders who validly tender their Notes after the Early Tender Date
but on or prior to 11:59 p.m. New York City time on October 2, 2017
(as such time and date may be extended by HSBC Finance in its sole
discretion, the “Expiration Date”) and do not validly withdraw
their tender will be eligible to receive the Purchase Price. The
“Purchase Price” for each U.S.$1,000 principal amount of Notes is
equal to the Total Consideration less the Early Tender Premium. In
each case, Holders whose Notes are accepted for purchase shall
receive accrued and unpaid interest from, and including, the last
interest payment date to, but not including, the applicable
Settlement Date (as defined in the Offer to Purchase), payable on
the applicable Settlement Date (“Accrued Interest”). Notes tendered
on or prior to 5:00 p.m., New York City time, on September 18, 2017
(as such time and date may extended by HSBC Finance in its sole
discretion, the “Withdrawal Date”) may be validly withdrawn at any
time until the Withdrawal Date (by following the procedures set
forth in the Offer to Purchase), but may not be validly withdrawn
thereafter. Tenders of Notes will not be valid if submitted after
the Expiration Date.
The following table summarizes the material pricing terms for
the Offer:
Reference
Hypothetical Outstanding Fixed U.S.
Bloomberg Total
CUSIP and ISIN
Principal Amount Title of Early Tender
Spread Treasury Reference Consideration
Nos.
of Notes Security Premium(1)(2) (bps)
Security Page (1)(2)(3)
Registered
Notes:CUSIP:40429CGD8ISIN:US40429CGD83
U.S.$2,938,669,000
6.676%SeniorSubordinated Notes dueJanuary
15,2021
U.S.$30 20
1.625%U.S.TreasuryNotes dueAugust31,
2022
PX1 $1,151.68
Rule 144A
Notes:CUSIP:40429CGB2ISIN:US40429CGB28
Regulation S
Notes:CUSIP:U4428DCD4ISIN:USU4428DCD40
(1) Per U.S.$1,000 principal amount of
Notes accepted for purchase.
(2) The Total Consideration for Notes validly tendered on or prior
to the Early Tender Date and accepted for purchase is calculated
using the Fixed Spread and includes the Early Tender Premium. (3)
The Hypothetical Total Consideration is based on the Fixed Spread
added to the Reference Yield as of 11:00 a.m., New York City time,
on September 1, 2017. The information provided in the above table
is for illustrative purposes only. HSBC Finance makes no
representation with respect to the actual consideration that may be
paid, and such amounts may be greater or less than those shown in
the above table depending on the Reference Yield as of the Price
Determination Time. The actual Total Consideration will be based on
the Fixed Spread added to the Reference Yield as of the Price
Determination Time. The hypothetical Total Consideration excludes
Accrued Interest.
Pursuant to the Offer Documents, if the purchase of all Notes
validly tendered (and not validly withdrawn) on or prior to the
Early Tender Date would cause HSBC Finance to purchase an aggregate
principal amount of Notes in excess of the Tender Cap, then such
Offer will be oversubscribed on the Early Tender Date, HSBC Finance
will not accept for purchase any Notes after the Early Tender Date
and HSBC Finance will (assuming satisfaction or, where applicable,
the waiver of the conditions to the Offer) accept for purchase on
the Early Settlement Date, the Notes tendered at or prior to the
Early Tender Date on a prorated basis such that HSBC Finance
purchases the maximum aggregate principal amount of Notes tendered
that does not exceed the Tender Cap. If the Offer is not
oversubscribed on the Early Tender Date and the purchase of all
Notes validly tendered (and not validly withdrawn) on or prior to
the Expiration Date would cause HSBC Finance to purchase an
aggregate principal amount of Notes in excess of the Tender Cap,
then the Offer will be oversubscribed on the Expiration Date and
HSBC Finance will (assuming satisfaction or, where applicable, the
waiver of the conditions to the Offer) accept for purchase such
tendered Notes as follows (i) first, on the Early Tender Date, HSBC
Finance will accept for purchase all Notes validly tendered (and
not validly withdrawn) on or prior to the Early Tender Date; and
(ii) second, promptly after the Expiration Date, HSBC Finance will
accept for purchase all Notes validly tendered (and not validly
withdrawn) after the Early Tender Date and on or prior to the
Expiration Date on a prorated basis such that HSBC Finance
purchases the maximum aggregate principal amount of Notes that does
not exceed the Tender Cap. Accordingly, if the Tender Cap is
reached in respect of tenders made on or prior to the Early Tender
Date, no Notes that are tendered after the Early Tender Date will
be accepted for purchase and any Notes accepted for purchase on the
Early Settlement Date will be accepted on a prorated basis up to
the amount of the Tender Cap.
HSBC Finance’s obligation to accept for payment, and to pay the
Total Consideration or the Purchase Price, as applicable, and
Accrued Interest for, Notes validly tendered and not validly
withdrawn pursuant to the Offer are subject to, and conditioned
upon, the satisfaction of, or HSBC Finance’s waiver of, the
conditions described under the heading “Conditions to the Offer” in
the Offer to Purchase.
Global Bondholder Services Corporation is acting as the
depositary and as the information agent for the Offer. HSBC
Securities (USA) Inc. is acting as Dealer Manager for the Offer.
Persons with questions about the Offer should contact HSBC
Securities (USA) Inc. at +1 (888) HSBC-4LM (toll free) or +1 (212)
525-5552 (collect). Requests for documents should be directed to
Global Bondholder Services Corporation at +1 (212) 430-3774 (banks
and brokers) or +1 (866) 470-3800 (all others toll free) or by
email at contact@gbsc-usa.com. The Offer Documents will be
available online at http://www.gbsc-usa.com/HSBC/ until the
Expiration Date or earlier termination of the Offer.
As a result of the Offer and the Repurchase, HSBC Finance
expects to record a one-time charge reflecting a loss on early
extinguishment of debt. Assuming that prior to September 30, 2017
the maximum aggregate principal amount of Notes allowed under the
Tender Cap are tendered and the Repurchase is completed, the charge
recorded during the third quarter of 2017 is estimated to be
approximately $260,000,000. The actual charge and the timing of its
recognition are dependent upon the final pricing, the aggregate
principal amount of Notes tendered in the Offer and the timing of
completion of the Offer.
This press release is for information purposes only and is not
an offer to purchase or a solicitation of acceptance of an offer to
purchase any of the Notes. The Offer is being made pursuant to the
Offer Documents, which HSBC Finance is distributing to Holders of
Notes. The Offer is not being made to Holders of Notes in any
jurisdiction in which the making or acceptance thereof would not be
in compliance with the securities, “blue sky” or other laws of such
jurisdiction.
Forward-looking statements
Certain statements in this press release are “forward-looking
statements” within the meaning of the rules and regulations of the
U.S. Securities and Exchange Commission. These statements are based
on management’s current expectations and are subject to uncertainty
and changes in circumstances. Actual results and other financial
conditions may differ materially from those included in these
statements due to a variety of factors including those contained in
HSBC Finance’s filings with the U.S. Securities and Exchange
Commission, including without limitation the “Risk Factors” section
of HSBC Finance’s 2016 Annual Report on Form 10-K. Precautionary
statements included in such filings should be read in conjunction
with this press release.
About HSBC Finance
HSBC Finance Corporation, through its subsidiaries, owns and
services a portfolio of residential real estate loans. HSBC Finance
Corporation is a subsidiary of HSBC North America Holdings Inc.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170905005828/en/
Media:HSBC Finance CorporationRob Sherman,
+1-212-525-6901robert.a.sherman@us.hsbc.com
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