Bloomberg News

HSBC Sells $2 Billion of 10-Year Bonds at Lower Relative Yield

March 27, 2012

HSBC Holdings Plc (HSBA) raised $2 billion selling 10-year notes at a lower relative yield than in its last sale four months ago, according to data compiled by Bloomberg.

The world’s second-largest lender by market value issued the 4 percent notes to yield 190 basis points more than similar- maturity Treasuries, Bloomberg data show. That compares with a 285 basis-point spread on $900 million of 4.875 percent debt maturing in January 2022 that HSBC sold in November.

HSBC joined UBS AG and MetLife Inc. (MET:US) in selling debt today as issuance of corporate bonds worldwide reaches $1.1 trillion this quarter, the fastest start to a year since 2009, Bloomberg data show. Investor confidence is being buoyed by loan programs by the European Central Bank to combat the region’s debt crisis, an agreement with lenders in the U.S. to end federal and state probes into abusive foreclosure practices and results of the Federal Reserve’s so-called stress tests on banks, according to Royal Bank of Scotland Group Plc’s Edward Marrinan.

“Banks have led a powerful rally in corporate credit,” Marrinan, a Stamford, Connecticut-based macro credit strategist at RBS, said in a telephone interview. “It’s been near-ideal market conditions for borrowers, and increasingly for financial institutions.”

Average yields on financial debt worldwide have declined to 3.83 percent as of March 26 from 4.62 percent on Nov. 14, the date of the prior HSBC bond sale, according to Bank of America Merrill Lynch index data.

UBS (UBS:US), Switzerland’s biggest bank, sold $2 billion of five- year covered bonds denominated in U.S. dollars and New York- based MetLife, the biggest U.S. life insurer, borrowed $1.5 billion in fixed- and floating-rate notes, Bloomberg data show.

To contact the reporter on this story: Charles Mead in New York at cmead11@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net


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Companies Mentioned

  • MET
    (MetLife Inc)
    • $50.79 USD
    • 0.38
    • 0.75%
  • UBS
    (UBS AG)
    • $16.45 USD
    • 0.11
    • 0.67%
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