HSBC 2015 Annual Report Download - page 427

HSBC HOLDINGS PLC
425
Strategic Report Financial Review Corporate Governance Financial Statements Shareholder Information
14 These securities are ineligible for inclusion in the capital base of HSBC in accordance with CRD IV rules.
15 Approximately $60m of the subordinated obligations are held by HSBC Holdings.
HSBC Holdings
2015 2014
$m $m
Subordinated liabilities:
–
at amortised cost 15,895 17,255
–
designated at fair value (Note 25) 11,956 10,494
At 31 December 27,851 27,749
HSBC Holdings’ subordinated liabilities
First call
date
Maturity
date
2015
$m
2014
$m
Tier 2 securities issued by HSBC Holdings plc
Amounts owed to third parties
$488m 7.625% subordinated notes1
–
May 2032 531 538
$222m 7.35% subordinated notes1
–
Nov 2032 278 278
$2,000m 6.5% subordinated notes1
–
May 2036 2,029 2,029
$2,500m 6.5% subordinated notes1
–
Sep 2037 3,085 3,278
$1,500m 6.8% subordinated notes1
–
Jun 2038 1,487 1,487
$2,000m 4.25% subordinated notes2,5
–
Mar 2024 2,078 2,069
$1,500m 5.25% subordinated notes2,5
–
Mar 2044 1,735 1,735
$1,500m 4.25% subordinated notes2
–
Aug 2025 1,529
–
£900m 6.375% callable subordinated notes1,3 Oct 2017 Oct 2022 1,432 1,558
£650m 5.75% subordinated notes2
–
Dec 2027 1,079 1,176
£650m 6.75% subordinated notes2
–
Sep 2028 955 1,005
£750m 7.0% subordinated notes2
–
Apr 2038 1,159 1,217
£900m 6.0% subordinated notes2
–
Mar 2040 1,310 1,379
€1,600m 6.25% subordinated notes2
–
Mar 2018 1,748 1,950
€1,750m 6.0% subordinated notes2
–
Jun 2019 2,284 2,623
€700m 3.625% callable subordinated notes1,4 Jun 2015 Jun 2020
–
878
€1,500m 3.375% callable subordinated notes2,5 Jan 2019 Jan 2024 1,694 1,898
€1,500m 3.0% subordinated notes2
–
Jun 2025 1,691
–
26,104 25,098
Amounts owed to HSBC undertakings
£500m 8.208% subordinated step-up cumulative notes4Jun 2015 Jun 2040
–
779
€750m 5.13% fixed/floating subordinated notes Mar 2016 Dec 2044 856 981
$900m 10.176% subordinated step-up cumulative notes Jun 2030 Jun 2040 891 891
1,747 2,651
At 31 December 27,851 27,749
1 Amounts owed to third parties represent securities included in the capital base of HSBC as tier 2 securities in accordance with the grandfathering
provisions under CRD IV rules.
2 These securities are included in the capital base of HSBC as fully CRD IV compliant tier 2 securities on an end point basis.
3 The interest rate payable after October 2017 is the sum of the three-month sterling Libor plus 1.3%.
4 In June 2015, HSBC Holdings called and redeemed the €700m 3.625% callable subordinated notes and £500m 8.208% non-cumulative step-up
perpetual preferred securities at par.
5 These subordinated notes are measured at amortised cost in HSBC Holdings, where the interest rate risk is hedged using a fair value hedge, while they
are measured at fair value in the Group.
Additional tier 1 capital securities
HSBC has included three types of additional tier 1 capital securities in its tier 1 capital. Additional tier 1 capital securities are
perpetual subordinated securities on which coupon payments may be deferred or cancelled at the discretion of HSBC Holdings.
The securities presented in this Note are accounted for as liabilities because HSBC has an obligation to pay dividends in
perpetuity. See Note 35 for the other two types of additional tier 1 capital securities accounted for as equity.
The additional tier 1 securities presented in this section do not meet the identifying criteria in full for recognition as tier 1
capital under CRD IV but are eligible as regulatory capital subject to grandfathering limits and progressive phase-out.
Guaranteed by HSBC Holdings or HSBC Bank plc
The five capital securities above that are guaranteed on a subordinated basis by HSBC Holdings or HSBC Bank plc (‘HSBC Bank’)
and are non-cumulative step-up perpetual preferred securities issued by Jersey limited partnerships. The proceeds of the
issues were on-lent to the respective guarantors by the limited partnerships in the form of subordinated notes. These
preferred securities qualify as additional tier 1 capital for HSBC under CRD IV by virtue of the application of grandfathering
provisions, and the two capital securities guaranteed by HSBC Bank also qualify as additional tier 1 capital for HSBC Bank (on a
solo and a consolidated basis) under CRD IV by virtue of the same grandfathering process.