Bloomberg News

HSBC Sells $171.8 Million Structured Note, Largest Since 2010

June 04, 2012

HSBC Holdings Plc (HBC:US), Europe’s largest bank, sold $171.8 million of one-year structured notes, its biggest U.S. offering since at least the beginning of 2010.

The securities, issued May 25 through the company’s HSBC USA Inc. unit, mirror the returns of the MSCI Daily Total Return Net World Index, which tracks equity markets in 24 developed countries, according to a prospectus filed with the U.S. Securities and Exchange Commission.

HSBC’s sales have risen this year even as the overall U.S. market has declined 17 percent to $18.1 billion in the first five months of 2012 compared with the year-earlier period, according to data compiled by Bloomberg. The bank’s $2.17 billion of issuance is almost three times last year’s $816.3 million over the same period, Bloomberg data show.

Robert Sherman, an HSBC spokesman, declined to comment.

Goldman Sachs Group Inc. sold $75 million of one-year notes tied to the MSCI Net World index on March 27, the first offering tied to the gauge, Bloomberg data show. Deutsche Bank AG is planning one-year notes also linked to the index, according to a filing with the SEC.

JPMorgan Chase & Co. underwrote HSBC’s offering for a 1 percent commission. The New York-based bank also distributed HSBC’s previously largest deal, $123.4 million of one-year notes issued Oct. 14, 2011, and tied to the Standard & Poor’s 500 Index.

Structured notes are securities created by banks, which package debt with derivatives to offer customized bets to investors while earning fees and raising money. Derivatives are contracts whose value is derived from stocks, bonds, currencies and commodities.

To contact the reporter on this story: Matt Robinson in New York at mrobinson55@bloomberg.net

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


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