HSBC Taiwan plans to issue $621.1mn financial bonds

Local Taiwanese banks follow HSBC’s move to fund expansion of lending business.

HSBC (Taiwan) has just set the price for its plan to float NT$18.3 billion ($621.07 million) of primary-lien financial bonds, the largest corporate-bond issuance so far this year, amid wave of financial-bond issuances expected this year.

A number of domestic banks also plan to complete price fixing for their subordinated financial bonds this week, including Chang Hwa Bank, Taipei Fubon Bank, Ta Chong Bank, and Bank SinoPac. Other banks have obtained the nod of approval from their boards of directors for financial-bond issuance plans, including Yuanta Bank, Cathay Bank, and Taiwan Cooperative Bank. 

A major purpose for the issuance plan of HSBC is to fund expansion of loaning business, due to its slower growth in solicitation of deposits, which results mainly from limited number of branches island-wide. An HSBC (Taiwan) executive noted that fund to be raised from the financial bonds will be used for medium- and long-term operating fund and support various development projects, including expansion of realty and other loan extensions, following its upgrading to a subsidiary. 

The financial-bond issuance of HSBC is the largest one ever among foreign banks and will have five different terms: five, 4.75, four, 3.75, and three years. 

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