Prices on a number of hssc's legacy Tier 2 bonds dropped last Friday after the bank said it had changed the securities' regulatory capital treatment, surprising some investors who had been expecting them to be called. In an announcement last Friday morning as the bank reported first-quarter earnings, HSBC said that the securities that were previously partly recognised by HSBC Holdings in its consolidated capital as Tier 2 capital under transitional arrangements (so-called grandfathering) would now be recognised as fully eligible Tier 2 instruments.
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