Institutional Update

HSBC Holdings plc: Notice of redemption

HSBC Holdings plc has announced its intention to redeem £1,000,000,000 of its 1.750% Fixed Rate/Floating Rate Senior Unsecured Notes due 2027 in whole. The redemption is scheduled for July 24, 2026, and the notes will be redeemed at a price of £1,000 per £1,000 principal amount. This move follows the company's recent financial performance and its ongoing efforts to manage risk and optimize capital allocation.

The redemption is subject to certain conditions outlined in HSBC's indenture agreement, which governs the issuance of these securities. The Base Indenture was originally dated August 26, 2009, and has been supplemented by a twentieth supplemental indenture dated March 24, 2021. This update includes various changes aimed at improving the terms and conditions of the notes.

As part of its redemption process, HSBC will provide holders with instructions on how to surrender their securities in exchange for payment of the face value plus accrued interest. The company has also emphasized the importance of tax compliance, warning that existing US federal income tax law may require backup withholding of 24% from payments made to holders who fail to furnish a taxpayer identification number certified by the IRS.

Why it matters

The redemption notice issued by HSBC Holdings plc for its £1,000,000,000 1.750% Fixed Rate/Floating Rate Senior Unsecured Notes due 2027 marks a significant milestone in the bank's debt management strategy. As of June 11, 2026, the issuer has elected to redeem the securities in whole, as per the terms of its indenture and the notes' specifications.

This move is part of HSBC's ongoing efforts to manage its debt profile and maintain financial stability. With a significant portion of its assets comprising low-risk investments, the bank aims to optimize its capital allocation and reduce its reliance on debt financing. The redemption process will enable HSBC to refinance its debt with more flexible and cost-effective instruments, ultimately enhancing its overall financial resilience.

The redemption notice also highlights the importance of regulatory compliance in the banking sector. As a global institution, HSBC is subject to various laws and regulations governing its debt issuance and redemption practices. By adhering to these standards, the bank demonstrates its commitment to transparency and accountability, which are essential for maintaining trust with its stakeholders, including investors, customers, and regulators.

Key points

* HSBC Holdings plc has announced a notice of redemption for its £1,000,000,000 1.750% Fixed Rate/Floating Rate Senior Unsecured Notes due 2027, with a scheduled redemption date of 24 July 2026. * The redemption price is set at £1,000 per £1,000 principal amount of the Securities, and accrued but unpaid interest will be payable to holders as of a specific record date prior to the redemption. * Holders are required to surrender their Securities at a designated location for redemption, with questions related to the notice addressed through HSBC Bank USA's contact information. * The notice includes important tax information regarding backup withholding requirements for certain U.S. federal income tax law compliance. * As of the latest available data, HSBC Holdings plc has assets totaling US$3,306bn as of 31 March 2026 and operates in 56 countries and territories worldwide. * The redemption notice is part of a broader set of agreements governing the Securities, including an indenture dated 2009 and a supplemental indenture dated 2021.

Institutional context

HSBC Holdings plc, the parent company of HSBC, is headquartered in London and serves customers worldwide from offices in 56 countries and territories. With assets of US$3,306bn at 31 March 2026, HSBC is one of the world's largest banking and financial services organisations.

The bank operates through several key subsidiaries, including retail banking, commercial banking, corporate banking, investment banking, and wealth management. Its global network provides a wide range of financial services to individuals, businesses, governments, and institutions. In addition to its core banking operations, HSBC also has significant interests in insurance, asset management, and securities trading.

HSBC is regulated by various international and domestic authorities, including the Prudential Regulation Authority (PRA) in the UK, the Financial Conduct Authority (FCA), and the Office of the Comptroller of the Currency (OCC) in the US. The bank is also subject to various international frameworks and standards, such as the Basel Accords and the Capital Markets Recovery Plan. As a result, HSBC has implemented robust risk management systems and controls to ensure compliance with regulatory requirements.

HSBC's global presence and extensive network of branches and subsidiaries provide access to a wide range of financial markets and instruments, including trade finance, foreign exchange, and securities trading. The bank's expertise in these areas enables it to provide comprehensive solutions to its clients across various industries and geographies.

Practical considerations

For those dealing with HSBC Holdings plc's senior unsecured notes, a redemption notice has been issued for £1,000,000,000 of the 1.750% fixed rate/floating rate securities due 2027. The redemption date is set for July 24, 2026, and the redemption price per £1,000 principal amount will be £1,000.

Practitioners should note that holders are required to surrender their securities at the registered office of HSBC Bank USA in New York. Alternatively, they can also contact HSBC Bank USA via email or telephone for more information. Given the complexity of US federal income tax law, it's essential that holders provide a taxpayer identification number certified correct under penalty of perjury on an IRS Form W-9 or applicable Form W-8 to avoid backup withholding.

As part of the redemption process, accrued but unpaid interest from July 24, 2025, will be payable to holders of record as of July 9, 2026. This highlights the importance of timely recordation and communication with HSBC Holdings plc's investor relations team for accurate payment processing.

Source: LSE RNS (Investegate)