HSBC sells rare A$135 mn extendable note issue
HSBC Bank Australia Ltd, a unit of British-based bank HSBC , said it has raised A$135 million ($120 million) in Australia through the issue of a rare type of extendable bond.
By Agencies |
SYDNEY: HSBC Bank Australia Ltd, a unit of British-based bank HSBC , said it has raised A$135 million ($120 million) in Australia through the issue of a rare type of extendable bond.
The bonds are short-term, usually of 13-months duration, but allow investors to roll the notes over until they mature, typically in five years. They are mainly issued in the U.S.
The Australian dollar notes sold by HSBC are slightly different. They offer a five-year term but investors can sell the notes back to HSBC on every coupon payment as long as they give six months of notice, an HSBC official said. HSBC paid an average of 35 basis points over BBSW for the five-year extendable issue.
By comparison, Bank of Scotland sold last week A$1 billion of five-year standard notes at 55 basis points over BBSW. Institutional investors and middle market participants bought the notes, he added. More is already in the pipeline.
"There is possible interest in a similar transaction with a one-year notice, instead of 6 months," the HSBC banker said without naming the potential borrower.
The bonds are short-term, usually of 13-months duration, but allow investors to roll the notes over until they mature, typically in five years. They are mainly issued in the U.S.
The Australian dollar notes sold by HSBC are slightly different. They offer a five-year term but investors can sell the notes back to HSBC on every coupon payment as long as they give six months of notice, an HSBC official said. HSBC paid an average of 35 basis points over BBSW for the five-year extendable issue.
By comparison, Bank of Scotland sold last week A$1 billion of five-year standard notes at 55 basis points over BBSW. Institutional investors and middle market participants bought the notes, he added. More is already in the pipeline.
"There is possible interest in a similar transaction with a one-year notice, instead of 6 months," the HSBC banker said without naming the potential borrower.
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