HSBC 2003 Annual Report Download - page 292

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
290
Subordinated loan capital is repayable at par on maturity, but some is repayable prior to maturity at the option of the
borrower, generally with the consent of the Financial Services Authority, in certain cases at a premium over par.
Interest rates on the floating rate loan capital are related to interbank offered rates. On the remaining subordinated
loan capital, interest is payable at fixed rates up to 9.875%.
1The interest on the 4.25% Callable subordinated notes changes in March 2011 to three-month EURIBOR plus 1.05 per cent.
2The interest rate on the Callable subordinated variable coupon notes is fixed at 5.75 per cent until June 2012. Thereafter, the rate per
annum is the sum of the gross redemption yield of the then prevailing five-year UK gilt plus 1.70 per cent.
3The interest on the 5% Callable subordinated notes changes in March 2018 to become the rate per annum which is the sum of the gross
redemption yield of the prevailing five-year UK gilt plus 1.80 per cent.
4 The interest margin on the Subordinated Step-up coupon floating rate notes 2009 increases by 0.5 per cent five years prior to its
maturity date.
5 The interest rate on the 9.25 per cent Step-up undated subordinated notes changes in December 2006 to become, for each successive
five year period, the rate per annum which is the sum of the yield on the then five year benchmark UK gilt plus 2.15 per cent.
6 The interest rate on the 8.625 per cent Step-up undated subordinated notes changes in December 2007 to become, for each successive
five year period, the rate per annum which is the sum of the yield on the then five year benchmark UK gilt plus 1.87 per cent.
7 The 7.65 per cent Subordinated notes are repayable at the option of each of the holders in May 2007.
Footnotes 1 to 6 all relate to notes that are repayable at the option of the borrower on the date of the change of the interest rate, and at
subsequent interest rate reset dates and interest payment dates in some cases, subject to the prior consent of the Financial Services
Authority.
34 Minority interests – non-equity
Preference shares issued by subsidiaries:
2003 2002
US$m US$m
€1,400m 5.3687% Non-cumulative Step-up Perpetual Preferred Securities1 ....................... 1,763 –
US$1,350m 9.547% Non-cumulative Step-up Perpetual Preferred Securities, Series 11 .......... 1,338 1,335
US$1,250m 4.61% Non-cumulative Step-up Perpetual Preferred Securities1 .......................... 1,250 –
£700m 5.844% Non-cumulative Step-up Perpetual Preferred Securities2 ........................ 1,250 –
US$900m 10.176% Non-cumulative Step-up Perpetual Preferred Securities, Series 21 ........ 889 889
£500m 8.208% Non-cumulative Step-up Perpetual Preferred Securities1 ........................ 884 801
€600m 8.03% Non-cumulative Step-up Perpetual Preferred Securities1 .......................... 749 622
US$150m Depositary shares each representing 25% interest in a share of
adjustable rate cumulative preferred stock, Series D3 ....................................... 150 150
US$150m Cumulative preferred stock4 ................................................................................. 150 150
US$125m Dutch auction rate transferable securities preferred stock, Series A and B5........... 125 125
CAD125m Non-cumulative redeemable class 1 preferred shares, Series A ............................ 96 78
US$75m Cumulative preferred stock .................................................................................. 75 75
US$125m 7.20% Series A cumulative preference shares6 ..................................................... –125
€77m 6.35% Series B cumulative preference shares6 ..................................................... –81
8,719 4,431
1See Step-up Perpetual Preferred Securities, note (a) Guaranteed by HSBC Holdings.
2See Step-up Perpetual Preferred Securities, note (b) Guaranteed by HSBC Bank.
3The preferred stock has been redeemable, at the option of HSBC USA Inc., in whole or in part from 1 July 1999 at par.
4The preferred stock is redeemable at the option of HSBC USA Inc., in whole or in part, at any time on or after 1 October 2007 at par.
5The preferred stock of each series is redeemable at the option of HSBC USA Inc., in whole or in part, on any dividend payment date
at par.
6The preference shares were redeemed by HSBC Republic Holdings (Luxembourg) S.A. in April 2003.
The redemption of all preference shares is subject to the prior consent of the Financial Services Authority and the
relevant local banking regulator.
Step-up Perpetual Preferred Securities
(a) Guaranteed by HSBC Holdings
The six issues of Non-cumulative Step-up Perpetual Preferred Securities (footnote 1) were made by Jersey