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HSBC Mexico’s perpetual, non-preferred, non-convertible, subordinated bonds issuance
Advising HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC, in its issuance of perpetual, non-preferred, non-convertible, subordinated bonds for an amount of USD$180 million to strengthen its capital structure, with prior authorization of the Mexican Central Bank. The bonds were fully subscribed by its English affiliate HSBC Holdings plc., in a private offer.
The issuance of this type of debt instrument by a Mexican banking institution requires the fulfillment of several requirements set forth in the Credit Institutions Law and in secondary regulation, including obtaining prior authorization from the Mexican Central Bank.
Furthermore, as required pursuant to the applicable regulation, HSBC México had to formalize the issuance of the subordinated bonds with the National Banking and Securities Commission and to deposit the respective instrument with the S.D. Indeval, Institución para el Depósito de Valores, S.A. de C.V. The bonds were issued in perpetuity (without a due date) as permitted under Mexican laws.
The deal qualifies as a cross border project involving Mexican and UK jurisdictions.