A US$10bn order book allowed hsbc to price the year's first Additional Tier 1 bond from a UK bank flat to its outstanding curve, but it still ended up paying one of its highest yields in the asset class. The self-led US$2bn perpetual non-call five priced with a yield of 6.875%, tighter than initial pricing thoughts of 7.25% and right around fair value based on the bank's existing 5.625% perp non-call fives. The bonds traded up to a dollar price of 101.25 last Thursday. The strong response was encouraging for the bank, which came to the market less than a week after it sold an US$8bn senior deal, and also just weeks ahead of the UK referendum on EU membership that has weighed on UK banks' bond spreads.
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