HSBC Innovative IPO

HSBC Bank Canada recently completed what were in essence its initial public offerings in the form of coincident offerings of Tier 1 capital for bank regulatory purposes. HSBC Securities (Canada) Inc. co-led both offerings with TD Securities as co-lead on the HSBC HaTS offering and Scotia Capital as co-lead on the preferred share offering. HSBC Bank Canada issued $125 million non-cumulative redeemable Class 1 Preferred Shares Series A and $200 million HSBC Canada Asset Trust Securities—Series 2010 (HSBC HaTS) Capital Trust Securities as Innovative Tier I capital. The Innovative Tier I Securities are the first to utilize a step up in rate in lieu of allowing investors to convert the preferred shares (into which the HSBC HaTS are exchangeable) into common shares of the Bank.

McCarthy Tétrault acted on the IPO and the HSBC HaTS. Members of the group include Byran Gibson and Henry J.P. Wiercinski (banking), Rich Balfour, Linda Brown, Joyce Lee and Michael Urbani (securities), Ed Kroft, Rosemarie Wertschek and Jerald M. Wortsman (tax). The underwriters were represented by Stikeman Elliott with a team of Mihkel Voore and Drew Allen, of the corporate practice and David Glicksman and Kevin Kelly of the tax practice in the Toronto office and Jonathan Drance, Neville McClure, Stuart MacKenzie and Jason McLean of the corporate practice in the Vancouver office.