HSBC : announces tender offers for six series of notes - Announcement made to the HK stock exchange

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HSBC Holdings plc

Overseas Regulatory Announcement

The attached announcement has been released to the other stock exchanges on which HSBC Holdings plc is listed.

The Board of Directors of HSBC Holdings plc as at the date of this announcement comprises: Mark Tucker*, Noel Quinn, Laura Cha† , Henri de Castries† , James Anthony Forese† , Steven Guggenheimer† , Irene Lee† , José Antonio Meade Kuribreña† , Heidi Miller† , Eileen K Murray† , David Nish† , Ewen Stevenson, Jackson Tai† and Pauline van der Meer Mohr† .

* Non-executive Group Chairman

• Independent non-executive Director
  Hong Kong Stock Code: 5

HSBC Holdings plc

Registered Office and Group Head Office:

8 Canada Square, London E14 5HQ, United Kingdom Web: www.hsbc.com

Incorporated in England with limited liability. Registered in England: number 617987

15 September 2020

HSBC HOLDINGS PLC ANNOUNCES TENDER OFFERS

FOR SIX SERIES OF NOTES

HSBC Holdings plc (the 'Company', 'we' or 'us') has announced the anticipated launch of six separate offers to purchase for cash any and all of the outstanding series of notes listed in the table below. The launch of the Offers (as defined below) is expected to be at or around 10:00 a.m. (New York City time) on September 15, 2020 (the 'Launch Date'). The Offer Documents will be available from 10:00 a.m. (New York City time) on the Launch Date at the following link: https://www.gbsc-usa.com/hsbc/.

We refer to the outstanding notes listed in the table below collectively as the 'Notes' and separately as a 'series' of Notes. We refer to each offer to purchase a series of Notes as an 'Offer', and collectively as the 'Offers'. The Offers are made upon the terms and subject to the conditions set forth in the Offer to Purchase dated September 15, 2020 relating to the Notes (the 'Offer to Purchase') and the related notice of guaranteed delivery (the 'Notice of Guaranteed Delivery', and together with the Offer to Purchase, the 'Offer Documents'). As of the date of the Offer to Purchase, the aggregate outstanding principal amount of Notes subject to the Offers is $8,147,122,000. References to '$' are to U.S. dollars.

Acceptance			Maturity	Principal	Reference	Fixed	Fixed
Title of Notes(2)	CUSIP	Amount
Date	Security	Spread	(3)
Priority			Outstanding	Price
Level(1)
					UST 2.625% due	+15
	2.950% Senior Unsecured		May 25,		basis
1	404280AY5	$2,500,000,000	May 15, 2021	N/A
Notes due May 2021	2021	points
			(US9128284P22)
					('bps')
	Floating Rate Senior		May 25,
2	Unsecured Notes due May	404280AZ2	$1,000,000,000	N/A	N/A	$1,010.96
2021
	2021
	4.000% Senior Unsecured		March 30,		UST 0.375% due
3	404280AN9	$2,000,000,000	March 31, 2022	+25 bps	N/A
Notes due March 2022	2022
			(US912828ZG82)
	3.400% Senior Unsecured		March 8,		UST 1.125% due
4	404280AV1	$1,032,090,000	February 28, 2021	+10 bps	N/A
Notes due March 2021	2021
			(US912828P873)
	5.100% Senior Unsecured		April 5,		UST 1.250% due
5	404280AK5	$907,191,000	March 31, 2021	+10 bps	N/A
Notes due April 2021	2021
			(US912828Q376)
	Floating Rate Senior		March 8,
6	Unsecured Notes due	404280AX7	$707,841,000	N/A	N/A	$1,010.11
2021
	March 2021

1. We will accept Notes in the order of their respective Acceptance Priority Level specified in the table above, subject to the satisfaction of the Financing Condition (as defined within the Offer to Purchase).
   It is possible that the Financing Condition might not be met with respect to any series of Notes with any Acceptance Priority Level, and such series of Notes will not be accepted for purchase, even if one or more series of Notes with a lower Acceptance Priority Level is accepted for purchase.
2. The 3.400% Senior Unsecured Notes due March 2021, the 5.100% Senior Unsecured Notes due April 2021, the 2.950% Senior Unsecured Notes due May 2021 and the 4.000% Senior Unsecured Notes due March 2022 are collectively referred to as the 'Fixed Rate Notes'. The Floating Rate Senior Unsecured Notes due March 2021 and the Floating Rate Senior Unsecured Notes due May 2021 are collectively refered to as the 'Floating Rate Notes'.
3. Per $1,000 principal amount.

The purpose of the Offers is to improve HSBC's liabilities structure, as the Notes cease to qualify as eligible liabilities items under CRR once they have a residual maturity of less than

Registered Office and Group Head Office:

8 Canada Square, London E14 5HQ, United Kingdom Web: www.hsbc.com

Incorporated in England with limited liability. Registered number 617987

Tender Offers/2

12 months. 'CRR' refers to regulation (EU) No 575/2013 of the European Parliament and of the Council of June 26, 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No 648/2012, as amended, supplemented or replaced from time to time, and (where relevant) any applicable successor EU or UK legislation.

Each Offer will expire at 5:00 p.m. (New York City time) on September 22, 2020, unless extended or earlier terminated by the Company in its sole discretion (such date and time with respect to an Offer, as the same may be extended, the 'Expiration Time'). Notes tendered for purchase may be validly withdrawn at any time at or prior to 5:00 p.m. (New York City time) on September 22, 2020 (such date and time with respect to an Offer, as the same may be extended, the 'Withdrawal Date'), but not thereafter, unless extended or earlier terminated with respect to an Offer by the Company in its sole discretion. We expect the Settlement Date to occur on the third business day after the Expiration Time, or September 25, 2020, unless extended or earlier terminated in respect of an Offer by the Company in its sole discretion (such date with respect to an Offer, as the same may be extended, the 'Settlement Date').

Each Offer is independent of the other Offers, and we may terminate, modify or waive the conditions of any Offer without terminating, modifying or waiving the conditions of any other Offer.

Upon the terms and subject to the conditions set forth in the Offer Documents, holders who (i) validly tender Notes at or prior to the Expiration Time or (ii) validly tender Notes at or prior to the Guaranteed Delivery Date pursuant to the Guaranteed Delivery Procedures (each as defined in the Offer to Purchase), and whose Notes are accepted for purchase by us, will receive consideration for each $1,000 principal amount of each series of Notes, which will be payable in cash on the Settlement Date as described below (the 'Consideration').

The Consideration applicable to each series of Floating Rate Notes validly tendered and accepted by us pursuant to the Offers will be the Fixed Price specified in the table above for such series of Notes.

The Consideration applicable to each series of Fixed Rate Notes validly tendered and accepted by us pursuant to the Offers will be calculated at or around 11:00 a.m. (New York City Time) on September 22, 2020 (such date and time with respect to an Offer, as the same may be extended by the Company in its sole discretion, the 'Price Determination Date'), in accordance with the formula set forth in the Offer to Purchase and with standard market practice, using the applicable 'Offer Yield', which will be equal to the sum of:

1. the applicable 'Reference Yield', as determined by the Dealer Manager, that corresponds to the bid-side yield of the Reference Security specified in the table above for such series of Fixed Rate Notes appearing on the Price Determination Date, such yield being directly quoted on the Bloomberg Reference Page (as defined below) and being rounded to the nearest 0.001 per cent. (with 0.0005 per cent. being rounded up), plus
2. the Fixed Spread specified in the table above for such series of Notes.

Accordingly, the Consideration payable by us for each $1,000 principal amount of each series of Fixed Rate Notes accepted by us will equal:

1. the present value on the Settlement Date of $1,000 principal amount of such Fixed Rate Notes due on the maturity date of such Fixed Rate Notes and all scheduled interest payments on such $1,000 principal amount of such Fixed Rate Notes to be made from (but excluding) the Settlement Date up to and including such maturity date, discounted to the Settlement Date at a discount rate equal to the applicable Offer Yield, minus
2. the Accrued Interest per $1,000 principal amount of such Fixed Rate Notes;

such total amount being rounded to the nearest cent per $1,000 principal amount of such Notes, and the above calculation being made in accordance with standard market practice as described by the formula set forth in the Offer to Purchase.

The 'Bloomberg Reference Page' means the page on Bloomberg from which the Dealer Manager will observe the bid-side yield of the Reference Security for each series of Fixed Rate Notes, which is expected to be PX3 or PX4, as applicable (or any other recognized

Tender Offers/3

quotation source selected by us in consultation with the Dealer Manager if such quotation source is not available or manifestly erroneous).

As soon as reasonably practicable after the Price Determination Date, the Company will issue a press release specifying the Consideration for each series of Fixed Rate Notes validly tendered and accepted.

In addition to the Consideration, holders whose Notes of a given series are accepted for purchase will also be paid a cash amount equal to accrued and unpaid interest on such Notes from, and including, the last interest payment date for such Notes to, but not including, the Settlement Date, rounded to the nearest cent (such amount in respect of a series of Notes, 'Accrued Interest'). Accrued Interest will be payable on the Settlement Date. For the avoidance of doubt, interest will cease to accrue on the Settlement Date for all Notes accepted in the Offers. Under no circumstances will any interest be payable to holders because of any delay on the part of Global Bondholder Services Corporation, as depositary, The Depository Trust Company ('DTC') or any other party in the transmission of funds to holders.

On the date of the Offer to Purchase, the Company launched a proposed new issuance (the 'Proposed Issuance') of senior unsecured debt securities in one or more series (the 'New Notes') which are not subject to the Offers. It is expected that the Offers will be financed with the net cash proceeds from the issuance of such New Notes, along with cash on hand, if necessary. No assurance can be given that the Proposed Issuance will be completed.

The Offers are subject to the terms and conditions described in the Offer Documents. In particular, the Company's obligation to complete an Offer with respect to a particular series of Notes is conditioned on satisfaction of the 'Financing Condition', meaning (1) the Proposed Issuance has been successfully completed on terms and conditions satisfactory to the Company in its sole discretion and (2) the aggregate principal amount of the Proposed Issuance, as set forth in an announcement at or around 10:00 a.m. (New York City Time) on September 16, 2020 (the 'Total Available Amount'), is sufficient to fund the sum of (a) the Consideration (excluding Accrued Interest) for all validly tendered and not validly withdrawn Notes of such series plus (b) the aggregate Consideration (excluding Accrued Interest) for all validly tendered and not validly withdrawn Notes of each series having a higher 'Acceptance Priority Level' (as specified in the above table, with 1 being the highest Acceptance Priority Level and 6 being the lowest Acceptance Priority Level), other than Excluded Notes (as defined below).

Notwithstanding any other provision in the Offer to Purchase to the contrary, if the Financing Condition is not satisfied for a particular series of Notes, at any time at or prior to the Expiration Time, then (1) we will not be obligated to accept for purchase such series of Notes and will terminate the Offer with respect to such series of Notes (such series of Notes, 'Excluded Notes'), and (2) if there is any series of Notes having a lower Acceptance Priority Level for which the Financing Condition is satisfied, meaning the Total Available Amount is equal to or greater than the sum of:

1. the Consideration necessary to purchase all validly tendered and not validly withdrawn Notes of such series (excluding Accrued Interest), plus
2. the aggregate Consideration necessary to purchase all validly tendered and not validly withdrawn Notes of all series having a higher Acceptance Priority Level than such series of Notes, other than the Excluded Notes (in each case, excluding Accrued Interest),

then all Notes of such series having a lower Acceptance Priority Level will be accepted for purchase, and the Financing Condition will be applied at each subsequent Acceptance Priority Level until there is no series of Notes with a lower Acceptance Priority Level to be considered for purchase for which the Financing Condition is met.

It is possible that any series of Notes with any Acceptance Priority Level will fail to meet the Financing Condition and therefore will not be accepted for purchase even if one or more series with a lower Acceptance Priority Level is accepted for purchase. If any series of Notes is accepted for purchase under the Offers, all Notes of that series that are validly tendered and not validly withdrawn will be accepted for purchase. As a result, no series of Notes accepted for purchase will be prorated.