5.875% Subordinated Notes due November 1,
2034 (CUSIP: 4042Q1AA5; ISIN: US4042Q1AA55); and
5.625% Subordinated Notes due August 15,
2035 (CUSIP: 4042Q1AB3; ISIN: US4042Q1AB39)
Upon the terms and subject to the conditions set forth in the
Offer to Purchase dated November 5, 2019 (as it may be amended or
supplemented from time to time, the “Offer to Purchase”) and in the
related Letter of Transmittal dated November 5, 2019 (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”), HSBC Bank USA, National Association (the “Bank”)
hereby announces its offers (each an “Offer” and collectively the
“Offers”) to purchase for cash any and all of its outstanding
5.875% Subordinated Notes due November 1, 2034 (CUSIP: 4042Q1AA5;
ISIN: US4042Q1AA55) (the “2034 Notes”) and 5.625% Subordinated
Notes due August 15, 2035 (CUSIP: 4042Q1AB3 ISIN: US4042Q1AB39)
(the “2035 Notes” and, together with the 2034 Notes, the “Notes”).
The Offers are being made to all registered holders of each series
of Notes (each, a “Holder” and collectively, the “Holders”).
Capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Offer to Purchase.
The Offers will expire at 5:00 p.m., New York City time, on
November 12, 2019, unless extended or earlier terminated (such time
and date, as the same may be extended, the “Expiration Time”).
Holders of Notes must validly tender and not validly withdraw their
Notes before the Expiration Time to receive the Total Consideration
(as defined below). Notes validly tendered may be withdrawn at
any time prior to the Expiration Time, but not thereafter.
Unless the Offers are extended, reopened or earlier terminated,
payment of the Total Consideration to Holders of Notes validly
tendered and not validly withdrawn at or prior to the Expiration
Time and accepted for purchase is expected to be made on November
15, 2019 (the “Notes Settlement Date”), other than the Notes
tendered using the guaranteed delivery procedures and delivered
after the Expiration Time for which payment is expected to be made
on November 15, 2019 (the “Guaranteed Delivery Settlement Date”;
each of the Guaranteed Delivery Settlement Date and the Notes
Settlement Date, a “Settlement Date”).
The “Total Consideration” for each $1,000 principal amount of
the Notes validly tendered and accepted for payment pursuant to the
applicable Offer will be determined in the manner described in the
Offer to Purchase by reference to the fixed spread specified on the
front cover of the Offer to Purchase for such series of the Notes
(the “Fixed Spread”) over the yield (the “Reference Yield”) based
on the bid side price of the U.S. Treasury Security specified on
the front cover of the Offer to Purchase for such series of the
Notes (the “Reference Benchmark Security”), as calculated by HSBC
Securities (USA) Inc. (the “Dealer Manager”) at 10:00 a.m., New
York City time, on November 4, 2019 (subject to certain exceptions
set forth in the Offer to Purchase, such time and date, as the same
may be extended, the “Price Determination Time”).
In addition to the Total Consideration, Holders who validly
tender and do not validly withdraw their Notes and whose Notes are
accepted for purchase in the Offers will also be paid on the
applicable Settlement Date accrued and unpaid interest from, and
including, the last interest payment date on such Notes up to, but
excluding, the Notes Settlement Date.
The following table summarizes the material pricing terms for
the Offers:
Title of Security
CUSIP/ISIN
Outstanding Principal
Amount
Reference Benchmark
Security
Fixed Spread (basis
points)
Bloomberg Reference
Page
Hypothetical Total
Consideration (1)(2)
5.875% Subordinated Notes due
2034
CUSIP: 4042Q1AA5 ISIN:
US4042Q1AA55
U.S. $1,000,000,000
1.625% US Treasury Notes Due
August 15, 2029
130
PX1
U.S. $1,332.88
5.625% Subordinated Notes due 2035
CUSIP: 4042Q1AB3 ISIN:
US4042Q1AB39
U.S. $750,000,000
2.875% US Treasury Notes Due May
15, 2049
105
PX1
U.S. $1,281.74
(1) Per each U.S.$1,000 principal amount
of Notes accepted for purchase. (2) The hypothetical Total
Consideration is based on the applicable Fixed Spread added to the
applicable Reference Yield as of 10:00 a.m., New York City time, on
November 4, 2019. The information provided in the above table is
for illustrative purposes only. HSBC Bank USA, National Association
does not make any 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 and unpaid
interest. The formula for determining the Total Consideration for
the Notes is set forth on Schedule I attached to the Offer to
Purchase.
Notwithstanding any other provision of the Offers, the
obligations of the Bank to accept for purchase, and to pay for,
Notes validly tendered and not validly withdrawn pursuant to the
Offers are subject to, and conditioned upon, the satisfaction of
or, where applicable, the waiver by the Bank of, the conditions
described under the heading “Conditions to the Offers” in the Offer
to Purchase.
Global Bondholder Services Corporation is acting as the
depositary and as the information agent for the Offers. HSBC
Securities (USA) Inc. is acting as Dealer Manager for the Offers.
Persons with questions about the Offers 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) 470-4200 (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 Offers.
The Bank previously elected to apply Fair Value Option
accounting to the Notes being tendered. As a result of the Offers
and assuming an expected take-up rate of 50%, the Bank expects to
record a net pre-tax gain on the re-purchase and early
extinguishment of debt of approximately $83 million in the fourth
quarter of 2019. This net pre-tax gain is due to an unrealized gain
associated with the Bank’s own credit spread, currently recorded in
accumulated other comprehensive income that will be realized upon
extinguishment and will more than offset the tender premium paid to
extinguish the debt. The actual gain and the timing of its
recognition are dependent upon the final pricing, the Bank’s own
credit spread at the settlement date, the aggregate principal
amount of Notes tendered in the Offers and the timing of completion
of the Offers.
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 Offers are being made pursuant to
the Offer Documents, which the Bank is distributing to Holders of
Notes. The Offers are 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.
Notes to editors
HSBC Bank USA, National Association (HSBC Bank USA, N.A.)
serves customers through retail banking and wealth management,
commercial banking, private banking, and global banking and markets
segments. It operates bank branches in: California; Connecticut;
Washington, D.C.; Florida; Maryland; New Jersey; New York;
Pennsylvania; Virginia; and Washington. HSBC Bank USA, N.A. is the
principal subsidiary of HSBC USA Inc., a wholly-owned subsidiary of
HSBC North America Holdings Inc. HSBC Bank USA, N.A. is a Member of
FDIC. Investment and brokerage services are provided through HSBC
Securities (USA) Inc., (Member NYSE/FINRA/SIPC) and insurance
products are provided through HSBC Insurance Agency (USA) Inc.
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 (the “SEC”). 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 USA Inc.’s
filings with the SEC, including without limitation the “Risk
Factors” section of HSBC USA Inc.’s 2018 Annual Report on Form
10-K. Precautionary statements included in such filings should be
read in conjunction with this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191105005677/en/
Media enquiries to: Rob Sherman (212) 525-6901
robert.a.sherman@us.hsbc.com US Head of Media Relations HSBC
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