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Three-year FRN is fifth HSBC Sydney deal in a month |
The fifth transaction from HSBC Sydney Branch (AA/Aa1) in less than a month was brought to market on August 8, with the issuer saying organic balance sheet expansion is likely to keep the branch active as a local borrower in future.
The latest deal was for A$300 million (US$262.92 million) of floating rate paper with a 2011 maturity – HSBC Sydney’s largest Australian issue to date following two A$200 million 2009 deals, one fixed and one floating, a further A$50 million of fixed rate 2009 paper and a A$100 million 2010 floater.
The 2011 deal was lead managed by HSBC Australia and Westpac and priced at 100 basis points over three month BBSW. According to HSBC it was placed domestically with 14 separate accounts, evenly split between balance sheet and real money buyers.
Andrew Koczanowski, senior manager interest rates and syndicate at HSBC in Sydney, says the flurry of recent deals is the product of natural growth of the balance sheet of a relatively new branch. “The Sydney branch has only been open since September 2006 and in its early stages was primarily funded through short term CDs,” he explains. “As the balance sheet has grown it has become prudent to start borrowing longer – our programme was signed on July 7 this year and we have since funded across five separate pricing points.”
With regard to its future borrowing strategy, Koczanowski says HSBC is “reluctant to build up too much at any one point on the curve” since its overall balance sheet remains relatively small, but the bank expects to continue term funding “in response to reverse inquiry with a focus on the one- to three-year part of the curve”.
| Issuer |
HSBC Sydney Branch |
| Rating (S&P/Moody's) |
AA/Aa1 |
| Sector |
Financial institution |
| Country |
Australia |
| Pricing date |
14 August 2008 |
| Settlement date |
14 August 2008 |
| Issue Amount |
A$300 million |
| Total issue amount |
A$300 million |
| Format |
Floating rate MTNs |
| Spread |
100bp/BBSW |
| Coupon |
100bp/BBSW |
| Issue price |
100 |
| Maturity date |
12 September 2011 |
| Lead Manager |
HSBC Australia, Westpac |
| Other deals outstanding |
Maturity |
Volume (A$M) |
| |
Nov 09 |
250 |
| |
Dec 09 |
200 |
| |
Feb 10 |
100 |
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Last Updated ( Tuesday, 12 August 2008 )
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