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Form 6-K HSBC HOLDINGS PLC For: Aug 18

August 18, 2015 11:31 AM EDT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a - 16 or 15d - 16

of the Securities Exchange Act of 1934

For the month of August 2015

 

 

HSBC Holdings plc

 

 

42nd Floor, 8 Canada Square, London E14 5HQ, England

 

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F).

Form 20-F  x            Form 40-F  ¨.

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934).

Yes  ¨            No   x

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-            ).

This Report on Form 6-K shall be deemed incorporated by reference into the

Registrant’s Registration Statement on Form F-3ASR (File No. 333-202420).

 

 

 


Exhibits

 

Second Supplemental Indenture, dated as of August 18, 2015.

   Exhibit 4.1

Opinion of Cleary Gottlieb Steen & Hamilton LLP, US counsel to the Registrant, dated August 18, 2015.

   Exhibit 5.1

Opinion of Cleary Gottlieb Steen & Hamilton LLP, English solicitors to the Registrant, dated August 18, 2015.

   Exhibit 5.2


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

      HSBC Holdings plc
Date: August 18, 2015      
      By:  

/s/ Iain J Mackay

      Name:   Iain J Mackay
      Title:   Group Finance Director

Exhibit 4.1

 

 

 

HSBC HOLDINGS PLC,

as Issuer

THE BANK OF NEW YORK MELLON, LONDON BRANCH,

as Trustee

HSBC BANK USA, NATIONAL ASSOCIATION,

as Paying Agent, Registrar and Exchange Rate Agent

 

 

SECOND SUPPLEMENTAL INDENTURE

Dated as of August 18, 2015

 

 

To the Dated Subordinated Debt Securities Indenture, dated as of March 12, 2014,

among the Issuer, the Trustee and the Paying Agent, Registrar and Exchange Rate Agent

$1,500,000,000 4.250% Subordinated Notes due 2025

 

 

 


TABLE OF CONTENTS

 

     Page  
ARTICLE 1   
DEFINITIONS   

Section 1.01

   Definition of Terms      1   

Section 1.02

   Supplemental Definitions      2   
ARTICLE 2   
THE NOTES   
ARTICLE 3   

AMENDMENTS TO THE BASE INDENTURE APPLICABLE TO ALL SERIES OF NOTES

ISSUED ON OR AFTER THE DATE OF THIS SUPPLEMENTAL INDENTURE

  

Section 3.01

   Financial Services Authority      5   

Section 3.02

   Payment of Additional Amounts      6   

Section 3.02

   Withholding Information      7   
ARTICLE 4   
AMENDMENTS TO THE BASE INDENTURE   

Section 4.01

   Governing Law      7   

Section 4.02

   Redemption of Debt Securities      8   
ARTICLE 5   
UK BAIL-IN POWER   

Section 5.01

   Agreement with Respect to the Exercise of the UK Bail-in Power      8   

Section 5.02

   Consent of Relevant Regulator      9   

Section 5.03

   Duties of the Trustee upon Exercise of the UK Bail-in Power      9   

Section 5.04

   Event of Default and Default      9   

Section 5.05

   Supplemental Indentures      9   

Section 5.06

   DTC      10   

Section 5.07

   Outstanding Notes      10   

Section 5.08

   Records Adjustment      10   

Section 5.09

   Compensation and Reimbursement      10   
ARTICLE 6   
MISCELLANEOUS   

Section 6.01

   Effect of this Supplemental Indenture; Ratification and Integral Part      10   

Section 6.02

   Priority      10   

Section 6.03

   Successors and Assigns      11   

 

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TABLE OF CONTENTS

(continued)

 

     Page  

Section 6.04

   Subsequent Holders’ Agreement      11   

Section 6.05

   Compliance      11   

Section 6.06

   Governing Law      11   

Section 6.07

   Counterparts      11   

Section 6.08

   Entire Agreement      11   

EXHIBIT A – Form of Global Security

     A-1   

 

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SECOND SUPPLEMENTAL INDENTURE, dated as of August 18, 2015 (this “Supplemental Indenture”), by and among HSBC Holdings plc, a public limited company duly organized and existing under the laws of England and Wales (the “Company”), having its principal office at 8 Canada Square, London E14 5HQ, England, The Bank of New York Mellon, London Branch, a New York banking corporation, as trustee (the “Trustee”), having its principal corporate trust office at 101 Barclay Street, Floor 7-East, New York, New York 10286, and HSBC Bank USA, National Association, as Paying Agent, Registrar and Exchange Rate Agent (the “Agent”), having its principal office at 452 Fifth Avenue, New York, New York 10018.

W I T N E S S E T H:

WHEREAS, the Company, the Trustee and the Agent have executed and delivered an Indenture dated as of March 12, 2014, as amended by a First Supplemental Indenture dated as of March 12, 2014 (the “First Supplemental Indenture”) (together, the “Base Indenture” and, together with this Supplemental Indenture, the “Indenture”), to provide for the issuance of the Company’s Debt Securities;

WHEREAS, Section 9.01(4) of the Base Indenture provides that the Company and the Trustee may enter into a supplemental indenture to change or eliminate any of the provisions of the Base Indenture that shall be effective only with respect to any series of Debt Securities created subsequent to the execution of such supplemental indenture;

WHEREAS, Section 9.01(5) of the Base Indenture provides that the Company and the Trustee may enter into a supplemental indenture to establish the forms or terms of the Debt Securities of any series without the consent of Holders as permitted under Sections 2.01 and 3.01 of the Base Indenture;

WHEREAS, the Company desires to amend and supplement certain provisions of the Base Indenture to apply to all series of Debt Securities under the Base Indenture created as of or after the date hereof, including the Notes (as defined below);

WHEREAS, the Company desires to issue a series of Debt Securities under the Base Indenture (as supplemented and amended by this Supplemental Indenture), $1,500,000,000 4.250% Subordinated Notes due 2025 (such series of Debt Securities, the “Notes”), to be issued pursuant to this Supplemental Indenture;

WHEREAS, all conditions and requirements necessary to make this Supplemental Indenture a valid and binding instrument in accordance with the terms of the Base Indenture have been performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized;

NOW, THEREFORE, each party agrees as follows for the benefit of the other parties and the equal and ratable benefit of the Holders.

ARTICLE 1

DEFINITIONS

Section 1.01. Definition of Terms. For all purposes of this Supplemental Indenture:

(a) capitalized terms used herein but not otherwise defined shall have the meanings assigned to them in the Base Indenture;


(b) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(c) the singular includes the plural and vice versa;

(d) the use of “or” is not intended to be exclusive unless expressly indicated otherwise;

(e) the section headings herein are for convenience only and shall not affect the construction of this Supplemental Indenture;

(f) wherever the words “include,” “includes” or “including” are used in this Supplemental Indenture, they shall be deemed to be followed by the words “without limitation”; and

(g) the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

Section 1.02. Supplemental Definitions. The following definitions shall apply to the Notes only:

(a) “Agent” has the meaning set forth in the introduction to this Supplemental Indenture.

(b) “Base Indenture” has the meaning set forth in the recitals to this Supplemental Indenture.

(c) “BRRD” means Directive 2014/59/EU of the European Parliament and of the Council of May 15, 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council.

(d) “Business Day” means any weekday, other than one on which banking institutions are authorized or obligated by law or executive order to close in London, England, or in New York City, New York.

(e) “Capital Disqualification Event” shall be deemed to have occurred if the Company determines, in good faith and after consultation with the Relevant Regulator, at any time after the Issue Date, that by reason of the non-compliance with the applicable criteria for Tier 2 capital under the Relevant Rules, the Notes are excluded fully from the Company’s Tier 2 capital (excluding for these purposes any non-recognition due to any applicable limitations on the amount of such capital of the Company).

(f) “Capital Instruments Regulations” means any regulatory capital rules, regulations or standards which are in the future applicable to the Company (on a solo or consolidated basis and including any implementation thereof or supplement thereto by the PRA from time to time) and which lay down the requirements to be fulfilled by financial instruments for inclusion in the Company’s regulatory capital (on a solo or consolidated basis), including as may be required by (i) the CRR and/or (ii) the CRD, including (for the avoidance of doubt) any regulatory technical standards and implementing technical standards issued by the European Banking Authority.

(g) “Company” has the meaning set forth in the introduction to this Supplemental Indenture.

(h) “CRD” means Directive 2013/36/EU of the European Parliament and of the Council of June 26, 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, and any successor directive.

 

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(i) “CRR” means regulation (EU) No 575/2013 of the European Parliament and of the Council of June 26, 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No 648/2012, and any successor regulation.

(j) “HSBC Group” means the Company together with its subsidiary undertakings.

(k) “Indenture” has the meaning set forth in the recitals to this Supplemental Indenture.

(l) “Interest Payment Date” has the meaning set forth in clause (d) of Article 2 of this Supplemental Indenture.

(m) “Issue Date” has the meaning set forth in clause (c) of Article 2 of this Supplemental Indenture.

(n) “Maturity” has the meaning set forth in clause (c) of Article 2 of this Supplemental Indenture.

(o) “Notes” has the meaning set forth in the recitals to this Supplemental Indenture.

(p) “PRA” means the UK Prudential Regulation Authority or any successor entity.

(q) “Regular Record Date” has the meaning set forth in clause (d) of Article 2 of this Supplemental Indenture.

(r) “Relevant Regulator” means the PRA or any successor entity or other entity primarily responsible for the prudential supervision of the Company.

(s) “Relevant Rules” means, at any time, the laws, regulations, requirements, guidelines and policies relating to capital adequacy (including, without limitation, as to leverage) then in effect in the United Kingdom including, without limitation to the generality of the foregoing, any delegated or implementing acts (such as regulatory technical standards) adopted by the European Commission and any regulations, requirements, guidelines and policies relating to capital adequacy adopted by the Relevant Regulator from time to time (whether or not such requirements, guidelines or policies are applied generally or specifically to the Company or to the Company and any of its holding or subsidiary companies or any subsidiary of any such holding company).

(t) “Relevant Supervisory Consent” means any required permission of the Relevant Regulator to the Company with respect to the relevant redemption or purchase.

(u) “Relevant UK Resolution Authority” means any authority with the ability to exercise a UK Bail-in Power (including, without limitation, Her Majesty’s Treasury, the Bank of England, the Prudential Regulation Authority or the Financial Conduct Authority).

(v) “Special Event” means either a Capital Disqualification Event or a Tax Event.

(w) “Tax Event” shall be deemed to have occurred if the Company has or will or would, but for redemption, become obliged to pay Additional Amounts with respect to the Notes as a result of any change in, or amendment to, the laws or regulations of the Taxing Jurisdiction (including any treaty to which the Taxing Jurisdiction is a party), or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after August 10, 2015.

 

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(x) “Trustee” has the meaning set forth in the introduction to this Supplemental Indenture.

(y) “UK Bail-in Power” means any statutory write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of credit institutions, banks, banking companies, investment firms and their parent undertakings incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or other members of the HSBC Group, including but not limited to the UK Banking Act 2009, as amended, and any laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of the BRRD, or any other European Union directive or regulation establishing a framework for the recovery and resolution of credit institutions, banks, banking companies, investment firms and their parent undertakings, pursuant to which obligations of a credit institution, bank, banking company, investment firm, its parent undertaking or any of its affiliates can be cancelled, written down and/or converted into shares or other securities or obligations of the obligor or any other person.

ARTICLE 2

THE NOTES

The following terms relating to the Notes are hereby established:

(a) The title of the Notes shall be “4.250% Subordinated Notes due 2025”;

(b) The aggregate principal amount of the Notes that may be authenticated and delivered under the Indenture shall not initially exceed $1,500,000,000 (except as otherwise provided in the Indenture);

(c) The Notes shall be issued on August 18, 2015 (the “Issue Date”) and the principal on the Notes shall be payable on August 18, 2025 (“Maturity”);

(d) Interest on the Notes shall be payable semi-annually at a rate of 4.250% per annum. Interest shall be payable in arrear on February 18 and August 18 of each year, beginning on February 18, 2016 (each, an “Interest Payment Date”). The “Regular Record Dates” for the Notes shall be the 15th calendar day preceding each Interest Payment Date, whether or not a Business Day. Interest on the Notes shall be calculated as contemplated by Section 3.10 of the Base Indenture;

(e) No premium, upon redemption or otherwise, shall be payable by the Company on the Notes;

(f) Principal of, and any interest on, the Notes shall be paid to the Holder through the Agent in its capacity as Paying Agent, having offices in New York City, New York;

(g) The Notes shall not be redeemable except as provided in Article Eleven of the Base Indenture, as amended by Section 3.02 of this Supplemental Indenture. The Notes shall not be redeemable at the option of the Holders at any time;

(h) The Notes are not issued as Discount Debt Securities or as Indexed Securities and are not subject to a Solvency Condition;

 

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(i) The Company shall have no obligation to redeem or purchase the Notes pursuant to any sinking fund or analogous provision;

(j) The Notes shall be issued only in denominations of $200,000 and integral multiples of $1,000 in excess thereof;

(k) The Notes shall be denominated in Dollars;

(l) The payment of principal of, and interest on, the Notes shall be payable only in the coin or currency in which the Notes are denominated which, pursuant to clause (k) above, shall be Dollars;

(m) The Notes shall not be converted into or exchanged at the option of the Company or otherwise for stock or other securities of the Company pursuant to Article Thirteen of the Base Indenture;

(n) No repayment of the principal amount of the Notes or payment of interest on the Notes shall become due and payable after the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority unless, at the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Company under the laws and regulations of the United Kingdom and the European Union applicable to the HSBC Group. Each Holder (including each beneficial owner of the Notes) acknowledges, agrees to be bound by and consents to the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority as specified in Article 5 of this Supplemental Indenture;

(o) The Notes shall be issued in the form of one or more global securities in registered form, without coupons attached, and the initial Holder with respect to each such global security shall be Cede & Co., as nominee of DTC;

(p) Except in limited circumstances, the Notes will not be issued in definitive form; and

(q) The forms of Note shall be evidenced by one or more global notes in registered form substantially in the form of Exhibit A to this Supplemental Indenture.

ARTICLE 3

AMENDMENTS TO THE BASE INDENTURE

APPLICABLE TO ALL SERIES OF NOTES ISSUED ON OR AFTER

THE DATE OF THIS SUPPLEMENTAL INDENTURE

Section 3.01. Financial Services Authority. All references to the “Financial Services Authority” in the Base Indenture, which was amended and replaced with “UK Prudential Regulation Authority or any successor institution” pursuant to Section 2.01 of the First Supplemental Indenture, are further amended and replaced with “the UK Prudential Regulation Authority or any successor entity or other entity primarily responsible for the prudential supervision of the Company.”

 

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Section 3.02. Payment of Additional Amounts. Article Ten of the Base Indenture, which was amended and replaced pursuant to Section 2.11 of the First Supplemental Indenture, is further amended by amending and restating Section 10.04 in its entirety, which shall read as follows:

Section 10.04. Payment of Additional Amounts. Unless otherwise specified as contemplated by Section 3.01, with respect to Debt Securities, all amounts of principal of (and premium, if any, on) and interest on any such Debt Securities shall be paid by the Company, without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or any taxing authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law. If deduction or withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the law of the Taxing Jurisdiction, the Company will pay such additional amounts of, or in respect of, the principal amount of (and premium, if any, on) and interest on such Debt Securities (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders, after such deduction or withholding, shall equal the respective amounts of principal, premium and interest, which would have been payable in respect of such Debt Security had no such deduction or withholding been required, provided that the foregoing will not apply to any such tax, levy, impost, duty, charge, fee, deduction or withholding which would not have been payable or due but for the fact that (i) the Holder or the owner of a beneficial interest in the Debt Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise has some connection or former connection with the Taxing Jurisdiction other than the holding or ownership of a Debt Security, or the collection of any payment of (or in respect of) principal of (and premium, if any, on) and interest or the enforcement of, any Debt Security; (ii) the relevant Debt Security is presented for payment in the Taxing Jurisdiction; (iii) the relevant Debt Security is presented for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amount on presenting the same for payment at the close of such 30 day period; (iv) such tax, levy, impost, duty, charge, fee, deduction or withholding is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income, or any law implementing or complying with, or introduced in order to conform to, such Directive; (v) presentation for payment of the relevant Debt Securities was made to a paying agent who was required to make (or pass through) such deduction or withholding and presentation for payment could have been made to a paying agent who was not required to make (or pass through) such deduction or withholding; (vi) there was a failure to comply by the Holder or the beneficial owner of the Debt Securities or the beneficial owner of any payment on such Debt Securities with a request of the Company addressed to the Holder or the beneficial owner, including a written request of the Company related to a claim for relief under any applicable double tax treaty (a) to provide information concerning the nationality, residence, identity or connection with a taxing jurisdiction of the Holder or the beneficial owner or (b) to make any declaration or other similar claim to satisfy any information or reporting requirement, if the information or declaration is required or imposed by a statute, treaty, regulation, ruling or administrative practice of the Taxing Jurisdiction as a precondition to exemption from withholding or deduction of all or part of the tax, duty, assessment or other governmental charge; (vii) such tax, levy, impost, duty, charge, fee, deduction or withholding is imposed in respect of any estate, inheritance, gift, sale, transfer, personal property, wealth or similar tax, duty, assessment or other governmental charge; or (viii) such tax, levy, impost, duty, charge, fee, deduction or withholding is imposed in respect of any combination of the above items. For the avoidance of doubt, all payments in respect of the Debt Securities shall be made subject to any withholding or deduction required pursuant to FATCA, and the Company shall not be required to pay any Additional Amounts on account of any such deduction or withholding required pursuant to FATCA.

 

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Whenever in this Indenture there is mentioned, in any context, the payment of any principal of (and premium, if any, on) or interest on any Debt Security, such mention shall be deemed to include mention of the payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made.

Section 3.03. Withholding Information. Article Ten of the Base Indenture, which was amended and replaced pursuant to Section 2.12 of the First Supplemental Indenture, is further amended by amending and restating Section 10.07 in its entirety, which shall read as follows:

Section 10.07. Withholding Information. The Company and the Paying Agent shall cooperate with each other and shall, upon reasonable request, provide each other with reasonable access to, and copies of, documents or information in their possession necessary for each of the Company and the Paying Agent to comply with any withholding tax or tax information reporting obligations imposed on any of them, including any obligations imposed pursuant to an agreement with a governmental authority (such information, “Withholding Information”). The Company and the Paying Agent further consent to the disclosure, transfer and reporting of such Withholding Information to any relevant government or taxing authority, any member of the Company’s or Paying Agent’s corporate group, any sub-contractors, agents, service providers or associates of the Company’s or Paying Agent’s corporate group, and any person making payments to the Company or Paying Agent or a member of the Company’s or Paying Agent’s corporate group to the extent that the Company or the Paying Agent, as applicable, reasonably determines that such disclosure, transfer or reporting is necessary or warranted to facilitate compliance with FATCA and to the extent such disclosure is not prohibited by applicable law. The Company agrees to inform the Paying Agent as soon as reasonably practical in writing of any changes to the Withholding Information supplied to the Paying Agent from time to time.

ARTICLE 4

AMENDMENTS TO THE BASE INDENTURE

APPLICABLE TO THE NOTES ONLY

Section 4.01. Governing Law. With respect to the Notes only, Article One of the Base Indenture is amended by amending and restating Section 1.12 in its entirety, which shall read as follows:

Section 1.12. Governing Law. THIS INDENTURE AND THE DEBT SECURITIES AND COUPONS AND THE RIGHTS AND DUTIES OF THE TRUSTEE AND THE AGENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, EXCEPT THAT ARTICLE TWELVE OF THIS INDENTURE AND THE CORRESPONDING PROVISIONS IN THE DEBT SECURITIES, THE AUTHORIZATION AND EXECUTION BY THE COMPANY OF THIS INDENTURE AND THE DEBT SECURITIES AND SECTION 5.01 OF THE SECOND SUPPLEMENTAL INDENTURE AND THE CORRESPONDING PROVISIONS IN THE DEBT SECURITIES (BUT, FOR THE AVOIDANCE OF DOUBT, NO OTHER ARTICLE OR SECTION OF THE INDENTURE, INCLUDING WITH RESPECT TO THE RIGHTS, DUTIES, IMMUNITIES AND INDEMNITIES OF THE TRUSTEE) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF ENGLAND AND WALES.

 

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Section 4.02. Redemption of Debt Securities. With respect to the Notes only, Article Eleven of the Base Indenture is amended by amending and restating Sections 11.01 and 11.08 in their entirety, and by adding Section 11.09, which shall read as follows:

Section 11.01. Applicability of Article. Debt Securities of any series that are redeemable before their Stated Maturity, if any, shall be redeemable in accordance with their terms and, except as otherwise specified pursuant to Section 3.01 with respect to the Debt Securities of such series, in accordance with this Article. Notwithstanding anything to the contrary in the Indenture or the Notes, (i) the Company may only redeem or purchase the Notes prior to the Maturity pursuant to this Article Eleven if the Company has obtained the Relevant Supervisory Consent, (ii) prior to the fifth anniversary of the Issue Date, if the Relevant Rules so oblige, the Company has demonstrated to the satisfaction of the Relevant Regulator that (x) the Special Event was not reasonably foreseeable at the Issue Date and (y) in the case of a Tax Event, such Tax Event was material and (iii) the Company has complied with any alternative or additional pre-conditions to redemption or purchase, as applicable, set out in the Relevant Rules.

 

Section 11.08. Optional Redemption in the Event of a Tax Event. In addition to any redemption provisions that may be specified pursuant to Section 3.01 for the Debt Securities of any series, the Debt Securities are redeemable, as a whole but not in part, at the option of the Company, on not less than 30 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of such Debt Securities to (but excluding) the date fixed for redemption, if, at any time, the Company shall determine that a Tax Event has occurred; provided, however, that no notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obliged to pay Additional Amounts were a payment in respect of such Debt Securities then due.

Section 11.09. Optional Redemption in the Event of a Capital Disqualification Event. In addition to any redemption provisions that may be specified pursuant to Section 3.01 for the Debt Securities of any series, the Debt Securities are redeemable, as a whole but not in part, at the option of the Company, on not less than 30 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of such Debt Securities to (but excluding) the date fixed for redemption, if, at any time, the Company shall determine that a Capital Disqualification Event has occurred.

ARTICLE 5

UK BAIL-IN POWER

Section 5.01. Agreement with Respect to the Exercise of the UK Bail-in Power. By its acquisition of the Notes, each Holder and beneficial owner of the Notes:

(a) acknowledges, agrees to be bound by and consents to the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority that may result in (x) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the Notes and/or (y) the conversion of all, or a portion, of the principal amount of, or interest on, the Notes into shares or other securities or other obligations of the Company or another person, including by means of an amendment or modification to the terms of the Indenture or of the Notes to give effect to the exercise by the Relevant UK Resolution Authority of such UK Bail-in Power;

 

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(b) acknowledges and agrees that the rights of such Holder or Beneficial Owner are subject to, and shall be varied, if necessary, so as to give effect to, the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority;

(c) acknowledges and agrees that no repayment of the principal amount of the Notes or payment of interest on the Notes shall become due and payable after the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority unless, at the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Company under the laws and regulations of the United Kingdom and the European Union applicable to the HSBC Group; and

(d) consents to the exercise of any UK Bail-in Power as it may be imposed without any prior notice by the Relevant UK Resolution Authority of its decision to exercise such power with respect to the Notes.

Section 5.02. Consent of the Relevant Regulator. Notwithstanding anything to the contrary in the Indenture, including Article 9 of the Base Indenture, the Company hereby agrees that it shall not amend Section 5.01 without the prior consent of the Relevant Regulator.

Section 5.03. Duties of the Trustee upon Exercise of the UK Bail-in Power. By its acquisition of the Notes, each Holder and beneficial owner of the Notes:

(a) acknowledges and agrees that the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Notes shall not give rise to a Default or Event of Default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act;

(b) to the extent permitted by the Trust Indenture Act, waives any and all claims, in law and/or in equity, against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Notes; and

(c) acknowledges and agrees that, upon the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority (i) the Trustee shall not be required to take any further directions from Holders under Section 5.12 of the Base Indenture and (ii) none of the Base Indenture or this Supplemental Indenture shall impose any duties upon the Trustee whatsoever with respect to the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority.

Section 5.04. Event of Default and Default. The exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Notes shall not constitute an Event of Default or a Default.

Section 5.05. Supplemental Indentures. In addition to the right to enter into supplemental indentures pursuant to Sections 9.01 and 9.02 of the Base Indenture, the Company and the Trustee may enter into one or more indentures supplemental to the Indenture to modify and amend the terms of the Indenture or the Notes, without the further consent of any Holders, to the extent necessary to give effect to the exercise by the Relevant UK Resolution Authority of the UK Bail-in Power.

 

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Section 5.06. DTC.

(a) Upon the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Notes, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the UK Bail-in Power for purposes of notifying Holders and beneficial owners of the Notes of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes.

(b) By its acquisition of the Notes, each Holder and beneficial owner of the Notes shall be deemed to have authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Notes to take any and all necessary action, if required, to implement the exercise of any UK Bail-in Power with respect to the Notes as it may be imposed, without any further action or direction on the part of such Holder or beneficial owner of the Notes, the Trustee or the Agent.

Section 5.07. Outstanding Notes. Notwithstanding Section 5.03(c) of this Supplemental Indenture, if, following the completion of the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority, the Notes remain outstanding (for example, if the exercise of the UK Bail-in Power results in only a partial write down of the principal of the Notes), then the Trustee’s duties under the Indenture shall remain applicable with respect to the Notes following such completion to the extent the Company and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the Indenture; provided, however, that notwithstanding the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority, there shall at all times be a trustee hereunder pursuant to, and in accordance with, Section 6.09 of the Base Indenture and the resignation and/or removal of the Trustee and the appointment of a successor trustee shall continue to be governed by Sections 6.10 and 6.11 of the Base Indenture, respectively, including to the extent no supplemental indenture or amendment to the Indenture is agreed upon pursuant to this Section 5.07.

Section 5.08. Records Adjustment. Upon receipt of any notice given pursuant to the Indenture, to the extent applicable, the Company, the Trustee and the Agent shall adjust their records to reflect any cancellation or deemed cancellation of any interest and any changes to the aggregate principal amount of the Notes then Outstanding, including due to any exercise of the UK Bail-in Power by the Relevant UK Resolution Authority.

Section 5.09. Compensation and Reimbursement. The Company’s obligations to indemnify the Trustee in accordance with Section 6.07 of the Base Indenture shall survive any exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Notes.

ARTICLE 6

MISCELLANEOUS

Section 6.01. Effect of this Supplemental Indenture; Ratification and Integral Part. This Supplemental Indenture shall become effective upon its execution and delivery.

Except as hereby expressly amended with respect to the Notes only, the Base Indenture is in all respects ratified and confirmed and all the terms, provisions and conditions thereof shall be and remain in full force and effect. This Supplemental Indenture shall be deemed an integral part of the Base Indenture in the manner and to the extent herein and therein provided.

Section 6.02. Priority. This Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein and therein provided. The provisions of this Supplemental Indenture shall, with respect to the Notes and subject to the terms hereof, supersede the provisions of the Base Indenture to the extent the Base Indenture is inconsistent herewith.

 

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Section 6.03. Successors and Assigns. All covenants and agreements in the Base Indenture, as supplemented and amended by this Supplemental Indenture, by the Company shall bind its successors and assigns, whether so expressed or not.

Section 6.04. Subsequent Holders’ Agreement. Any Holder or beneficial owner of the Notes that acquires the Notes in the secondary market and any successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of any Holder or beneficial owner of the Notes shall be deemed to acknowledge, agree to be bound by and consent to the same provisions specified herein to the same extent as the Holders or beneficial owners of the Notes that acquire the Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Notes related to the UK Bail-in Power.

Section 6.05. Compliance. The Agent shall be entitled to take any action or to refuse to take any action which the Agent regards as necessary for the Agent to comply with any applicable law, regulation or fiscal requirement, court order, or the rules, operating procedures or market practice of any relevant stock exchange or other market or clearing system.

Section 6.06. Governing Law. This Supplemental Indenture and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York, except that the authorization and execution by the Company of this Supplemental Indenture, Article Twelve of the Base Indenture and the corresponding provisions in the Notes and Section 5.01 of this Supplemental Indenture and the corresponding provisions in the Notes (but, for the avoidance of doubt, no other Article or Section of the Indenture, including with respect to the rights, duties, immunities and indemnities of the Trustee) shall be governed by, and construed in accordance with, the laws of England and Wales.

Section 6.07. Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 6.08. Entire Agreement. This Supplemental Indenture constitutes the entire agreement of the parties hereto with respect to the amendments to the Base Indenture set forth herein.

[Remainder of page intentionally left blank]

 

11


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first stated above.

 

HSBC HOLDINGS PLC,
as Issuer

By:  

 

Name:  
Title  

THE BANK OF NEW YORK MELLON,

LONDON BRANCH,
as Trustee

By:  

 

Name:  
Title:  

HSBC BANK USA, NATIONAL

ASSOCIATION,
as Paying Agent, Registrar and Exchange Rate Agent

By:  

 

Name:  
Title:  

[Signature Page to Dated Subordinated Debt Second Supplemental Indenture]


EXHIBIT A

FORM OF GLOBAL SECURITY

CUSIP No. 404280 AU3

No. [●]

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS GLOBAL SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

BY ITS ACQUISITION OF THE DEBT SECURITIES REPRESENTED BY THIS GLOBAL SECURITY, EACH HOLDER AND BENEFICIAL OWNER OF THE DEBT SECURITIES (I) ACKNOWLEDGES, AGREES TO BE BOUND BY AND CONSENTS TO THE EXERCISE OF ANY UK BAIL-IN POWER BY THE RELEVANT UK RESOLUTION AUTHORITY THAT MAY RESULT IN (X) THE REDUCTION OR CANCELLATION OF ALL, OR A PORTION, OF THE PRINCIPAL AMOUNT OF, OR INTEREST ON, THE DEBT SECURITIES AND/OR (Y) THE CONVERSION OF ALL, OR A PORTION, OF THE PRINCIPAL AMOUNT OF, OR INTEREST ON, THE DEBT SECURITIES INTO SHARES OR OTHER SECURITIES OR OTHER OBLIGATIONS OF THE COMPANY OR ANOTHER PERSON, INCLUDING BY MEANS OF AN AMENDMENT OR MODIFICATION TO THE TERMS OF THE INDENTURE OR OF THE DEBT SECURITIES TO GIVE EFFECT TO THE EXERCISE BY THE RELEVANT UK RESOLUTION AUTHORITY OF SUCH UK BAIL-IN POWER; (II) ACKNOWLEDGES AND AGREES THAT THE RIGHTS OF SUCH HOLDER OR BENEFICIAL OWNER ARE SUBJECT TO, AND SHALL BE VARIED, IF NECESSARY, SO AS TO GIVE EFFECT TO, THE EXERCISE OF ANY UK BAIL-IN POWER BY THE RELEVANT UK RESOLUTION AUTHORITY; (III) ACKNOWLEDGES AND AGREES THAT NO REPAYMENT OF THE PRINCIPAL AMOUNT OF THE DEBT SECURITIES OR PAYMENT OF INTEREST ON THE DEBT SECURITIES SHALL BECOME DUE AND PAYABLE AFTER THE EXERCISE OF ANY UK BAIL-IN POWER BY THE RELEVANT UK RESOLUTION AUTHORITY UNLESS, AT THE TIME THAT SUCH REPAYMENT OR PAYMENT, RESPECTIVELY, IS SCHEDULED TO BECOME DUE, SUCH REPAYMENT OR PAYMENT WOULD BE PERMITTED TO BE MADE BY THE COMPANY UNDER THE LAWS AND REGULATIONS OF THE UNITED KINGDOM AND THE EUROPEAN UNION APPLICABLE TO THE HSBC GROUP; AND (IV) CONSENTS TO THE EXERCISE OF ANY UK BAIL-IN POWER AS IT MAY BE IMPOSED WITHOUT ANY PRIOR NOTICE BY THE RELEVANT UK RESOLUTION AUTHORITY OF ITS DECISION TO EXERCISE SUCH POWER WITH RESPECT TO THE DEBT SECURITIES.

GLOBAL SECURITY

HSBC Holdings plc

US$[●]

4.250% SUBORDINATED NOTES DUE 2025

This is a Global Security in respect of a duly authorized issue by HSBC Holdings plc (the “Issuer,” which term includes any successor Person under the Indenture hereinafter referred to) of debt securities, designated as specified in the title hereof, in the aggregate face amount of US$[●] (the “Debt Securities”).

 

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The Issuer, for value received, hereby promises to pay CEDE & CO., or registered assigns on August 18, 2025 or on such earlier date as this Global Security may be redeemed (“Maturity”), the principal amount hereof and will pay interest on the said principal amount from August 18, 2015 (the “Issue Date”) or the most recent Interest Payment Date on which interest has been paid or duly provided for, semi-annually in arrear on February 18 and August 18 in each year (each such date, an “Interest Payment Date”), commencing February 18, 2016. Interest on this Global Security shall accrue at a rate of 4.250% per annum, until the principal amount hereof is paid or made available for payment.

Interest in respect of this Global Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name this Global Security (or one or more Predecessor Global Securities) is registered at the close of business on the Regular Record Date for such interest.

Payment of interest, if any, in respect of this Global Security may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Register, or by wire transfer or transfer by any other means to an account designated in writing by such Person to the Paying Agent at least 15 days prior to such payment date.

Any interest in respect of this Global Security that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holders thereof on the relevant Regular Record Date by virtue of their having been such Holders; and such Defaulted Interest may be paid by the Issuer, at its election in each case, as provided in Clause (1) or (2) below:

 

  (1) The Issuer may elect to make payment of such Defaulted Interest to the Persons in whose names this Global Security (or its respective Predecessor Global Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the manner provided for in the Indenture.

 

  (2) The Issuer may make payment of any Defaulted Interest on this Global Security in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Global Security may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Issuer to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

All payments are subject in all cases to any applicable fiscal or other laws, regulations and directives in any jurisdiction, but without prejudice to the “Additional Amounts” provisions below. For the purposes of the preceding sentence, the phrase “fiscal or other laws, regulations and directives” shall include any obligation of the Issuer to withhold or deduct from a payment pursuant to an agreement described in Section 1471(b) of the Internal Revenue Code of 1986, as amended (the “Code”), or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations thereunder or official interpretations thereof or any law implementing an intergovernmental approach thereto (collectively, “FATCA”).

All amounts of principal of (and premium, if any, on) and interest on this Global Security shall be paid by the Issuer, without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings now or

 

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hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or any taxing authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law. If deduction or withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the law of the Taxing Jurisdiction, the Issuer will pay such additional amounts of, or in respect of, the principal amount of (and premium, if any, on) and interest on this Global Security (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders, after such deduction or withholding, shall equal the respective amounts of principal, premium and interest, which would have been payable in respect of this Global Security had no such deduction or withholding been required, provided that the foregoing will not apply to any such tax, levy, impost, duty, charge, fee, deduction or withholding which would not have been payable or due but for the fact that (i) the Holder or the owner of a beneficial interest in this Global Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise has some connection or former connection with the Taxing Jurisdiction other than the holding or ownership of this Global Security, or the collection of any payment of (or in respect of) principal of (and premium, if any, on) and interest or the enforcement of, this Global Security; (ii) this Global Security is presented for payment in the Taxing Jurisdiction; (iii) this Global Security is presented for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amount on presenting the same for payment at the close of such 30 day period; (iv) such tax, levy, impost, duty, charge, fee, deduction or withholding is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income, or any law implementing or complying with, or introduced in order to conform to, such Directive; (v) presentation for payment of this Global Security was made to a paying agent who was required to make (or pass through) such deduction or withholding and presentation for payment could have been made to a paying agent who was not required to make (or pass through) such deduction or withholding; (vi) there was a failure to comply by the Holder or the beneficial owner of this Global Security or the beneficial owner of any payment on this Global Security with a request of the Issuer addressed to the Holder or the beneficial owner, including a written request of the Issuer related to a claim for relief under any applicable double tax treaty (a) to provide information concerning the nationality, residence, identity or connection with a taxing jurisdiction of the Holder or the beneficial owner or (b) to make any declaration or other similar claim to satisfy any information or reporting requirement, if the information or declaration is required or imposed by a statute, treaty, regulation, ruling or administrative practice of the Taxing Jurisdiction as a precondition to exemption from withholding or deduction of all or part of the tax, duty, assessment or other governmental charge; (vii) such tax, levy, impost, duty, charge, fee, deduction or withholding is imposed in respect of any estate, inheritance, gift, sale, transfer, personal property, wealth or similar tax, duty, assessment or other governmental charge; or (viii) such tax, levy, impost, duty, charge, fee, deduction or withholding is imposed in respect of any combination of the above items. For the avoidance of doubt, all payments in respect of this Global Security shall be made subject to any withholding or deduction required pursuant to FATCA, and the Issuer shall not be required to pay any Additional Amounts on account of any such deduction or withholding required pursuant to FATCA.

Whenever in this Global Security there is mentioned, in any context, the payment of any principal of (and premium, if any, on) or interest on any Debt Security, such mention shall be deemed to include mention of the payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made.

 

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Upon any exchange of a part of this Global Security for definitive Debt Securities, the portion of the principal amount hereof so exchanged shall be endorsed by the Registrar on Schedule A hereto. The principal amount hereof shall be reduced for all purposes by the amount so exchanged.

Reference is hereby made to the further provisions of this Global Security set forth on the reverse hereof, which further provisions shall for the purposes hereof have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee or an authenticating agent by manual signature, this Global Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purposes.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed under its corporate seal.

 

HSBC Holdings plc,
as Issuer

By  

 

  [●]

Dated: [●]

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Debt Securities of a series issued under the within-mentioned Indenture.

 

The Bank of New York Mellon, London Branch,
as Trustee

By  

 

  [●]

Dated: [●]

 

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REVERSE OF GLOBAL SECURITY

US$[●]

4.250% SUBORDINATED NOTES DUE 2025

This Global Security is one of a duly authorized issue of Debt Securities issued and to be issued in one or more series under and governed by an Indenture dated as of March 12, 2014, by and among the Issuer, The Bank of New York Mellon, London Branch, as trustee (the “Trustee,” which term includes any successor trustee under the Indenture), and HSBC Bank USA, National Association, as Registrar, Paying Agent and Exchange Rate Agent (the “Agent,” which term includes any successor Registrar, Paying Agent or Exchange Rate Agent), as amended by a First Supplemental Indenture dated as of March 12, 2014, by and among the Issuer, the Trustee and the Agent (together, the “Base Indenture”), as supplemented by a Second Supplemental Indenture dated as of August 18, 2015, by and among the Issuer, the Trustee and the Agent (the “Second Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Trustee, the Holders and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered.

The rights of Holders shall, in the event of the winding up of the Issuer, to the extent more fully set out in the Indenture, be subordinated and subject in right of payment to the prior payment in full of all claims of creditors of the Issuer except creditors in respect of any liability of the Issuer however arising for the payment of money, the right to payment of which by the Issuer by the terms thereof is, or is expressed to be, subordinated in the event of a winding up of the Issuer to the claims of all or any of the creditors of the Issuer, and creditors in respect of debt securities with no maturity issued pursuant to a separate indenture between the Issuer and a trustee.

Under the terms of the Indenture, the Debt Securities may be redeemed, as a whole but not in part, at the Issuer’s option, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of such Debt Securities to (but excluding) the date fixed for redemption, on not less than 30 nor more than 60 days’ notice, if, at any time, the Issuer shall determine either that (i) a Tax Event has occurred; provided, however, that no notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay Additional Amounts were a payment in respect of such Debt Securities then due; or (ii) a Capital Disqualification Event has occurred. Notwithstanding anything to the contrary in the Indenture or the Debt Securities, (a) the Issuer may only redeem or purchase the Debt Securities prior to Maturity if the Issuer has obtained the Relevant Supervisory Consent, (b) prior to the fifth anniversary of the Issue Date, if the Relevant Rules so oblige, the Issuer has demonstrated to the satisfaction of the Relevant Regulator that (x) the Special Event was not reasonably foreseeable at the Issue Date and (y) in the case of a Tax Event, such Tax Event was material and (c) the Issuer has complied with any alternative or additional pre-conditions to redemption or purchase, as applicable, set out in the Relevant Rules.

“BRRD” means Directive 2014/59/EU of the European Parliament and of the Council of May 15, 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council.

A “Capital Disqualification Event” shall be deemed to have occurred if the Issuer determines, in good faith and after consultation with the Relevant Regulator, at any time after the Issue Date, that by reason of the non-compliance with the applicable criteria for Tier 2 capital under the Relevant Rules, the Debt Securities are excluded fully from the Issuer’s Tier 2 capital (excluding for these purposes any non-recognition due to any applicable limitations on the amount of such capital of the Issuer).

 

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“Capital Instruments Regulations” means any regulatory capital rules, regulations or standards which are in the future applicable to the Company (on a solo or consolidated basis and including any implementation thereof or supplement thereto by the PRA from time to time) and which lay down the requirements to be fulfilled by financial instruments for inclusion in the Company’s regulatory capital (on a solo or consolidated basis), including as may be required by (i) the CRR and/or (ii) the CRD, including (for the avoidance of doubt) any regulatory technical standards and implementing technical standards issued by the European Banking Authority.

“CRD” means Directive 2013/36/EU of the European Parliament and of the Council of June 26, 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, and any successor directive.

“CRR” means regulation (EU) No 575/2013 of the European Parliament and of the Council of June 26, 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No 648/2012, and any successor regulation.

“Relevant Regulator” means the PRA or any successor entity or other entity primarily responsible for the prudential supervision of the Issuer.

“Relevant Rules” means, at any time, the laws, regulations, requirements, guidelines and policies relating to capital adequacy (including, without limitation, as to leverage) then in effect in the United Kingdom including, without limitation to the generality of the foregoing, any delegated or implementing acts (such as regulatory technical standards) adopted by the European Commission and any regulations, requirements, guidelines and policies relating to capital adequacy adopted by the Relevant Regulator from time to time (whether or not such requirements, guidelines or policies are applied generally or specifically to the Issuer or to the Issuer and any of its holding or subsidiary companies or any subsidiary of any such holding company).

“Relevant Supervisory Consent” means any required permission of the Relevant Regulator to the Issuer with respect to the relevant redemption or purchase.

A “Special Event” means either a Capital Disqualification Event or a Tax Event.

A “Tax Event” shall be deemed to have occurred if the Issuer has or will or would, but for redemption, become obliged to pay Additional Amounts with respect to the Debt Securities as a result of any change in, or amendment to, the laws or regulations of the Taxing Jurisdiction (including any treaty to which the Taxing Jurisdiction is a party), or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after August 10, 2015.

If an Event of Default with respect to the Debt Securities of this series shall occur and be continuing, the principal of all of the Debt Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture provides that in certain circumstances such declaration and its consequences may be rescinded and annulled by the Holders of a majority in aggregate principal amount of the Outstanding Debt Securities of such series. If a Default with respect to Debt Securities of this series occurs and is continuing, the Trustee may pursue certain remedies as set forth in the Indenture. The Holders of not less than a majority in aggregate principal amount of the Outstanding Debt Securities of this series may on behalf of all Holders waive any past Event of Default or

 

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any Default under the Indenture or the Debt Securities except a default in the payment of principal of or any installment of interest on any of the Debt Securities or in respect of a covenant or provision which under the Indenture cannot be modified or amended without the consent of the Holder of this Debt Security, and any such consent or waiver shall bind every future Holder of this Debt Security and of any Debt Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Debt Security or such other Debt Securities.

The Indenture contains provisions permitting the Issuer and the Trustee (i) without the consent of the Holders of any Debt Securities issued under the Indenture to execute one or more supplemental indentures for certain enumerated purposes, such as to cure any ambiguity or to secure the Debt Securities, and (ii) with the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Debt Securities of each series of Debt Securities affected thereby, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of modifying in any manner the rights of Holders under the Indenture; provided that, with respect to certain enumerated provisions, no such supplemental indenture may be entered into without the consent of the Holder of each Outstanding Debt Security affected thereby. The Indenture also permits the Holders of at least a majority in aggregate principal amount of the Outstanding Debt Securities of each series to be affected, on behalf of the Holders of all Debt Securities of such series, to waive compliance by the Issuer with certain restrictive provisions of the Indenture. Any such consent or waiver by the Holder of this Global Security shall bind every future Holder of this Global Security and of any Global Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Global Security or such other Global Securities.

Subject to the terms of the Indenture, the Depositary may surrender this Global Security or any portion hereof in exchange, in whole or in part, for definitive Debt Securities, of this series in registered form and the Registrar, acting on behalf of the Issuer, shall authenticate and deliver in exchange for this Global Security or the portions thereof to be exchanged, an equal aggregate face amount of definitive Debt Securities (duly countersigned) in the numbers and in the names advised by the Depositary.

No repayment of the principal amount of the Debt Securities or payment of interest on the Debt Securities shall become due and payable after the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority unless, at the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Issuer under the laws and regulations of the United Kingdom and the European Union applicable to the HSBC Group. The exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Securities shall not constitute an Event of Default or a Default.

“UK Bail-in Power” means any statutory write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of credit institutions, banks, banking companies, investment firms and their parent undertakings incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Issuer or other members of the HSBC Group, including but not limited to the UK Banking Act 2009, as amended, and any laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of the BRRD, or any other European Union directive or regulation establishing a framework for the recovery and resolution of credit institutions, banks, banking companies, investment firms and their parent undertakings, pursuant to which obligations of a credit institution, bank, banking company, investment firm, its parent undertaking or any of its affiliates can be cancelled, written down and/or converted into shares or other securities or obligations of the obligor or any other person.

 

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“Relevant UK Resolution Authority” means any authority with the ability to exercise a UK Bail-in Power (including, without limitation, Her Majesty’s Treasury, the Bank of England, the Prudential Regulation Authority or the Financial Conduct Authority).

By its acquisition of the Debt Securities, each Holder and beneficial owner of the Debt Securities: (a) acknowledges, agrees to be bound by and consents to the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority that may result in (x) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the Debt Securities and/or (y) the conversion of all, or a portion, of the principal amount of, or interest on, the Debt Securities into shares or other securities or other obligations of the Issuer or another person, including by means of an amendment or modification to the terms of the Indenture or of the Debt Securities to give effect to the exercise by the Relevant UK Resolution Authority of such UK Bail-in Power; (b) acknowledges and agrees that the rights of such Holder or Beneficial Owner are subject to, and shall be varied, if necessary, so as to give effect to, the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority; (c) acknowledges and agrees that no repayment of the principal amount of the Debt Securities or payment of interest on the Debt Securities shall become due and payable after the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority unless, at the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Issuer under the laws and regulations of the United Kingdom and the European Union applicable to the HSBC Group; and (d) consents to the exercise of any UK Bail-in Power as it may be imposed without any prior notice by the Relevant UK Resolution Authority of its decision to exercise such power with respect to the Debt Securities.

By its acquisition of the Debt Securities, each Holder and beneficial owner of the Debt Securities: (a) acknowledges and agrees that the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Debt Securities shall not give rise to a Default or Event of Default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act; (b) to the extent permitted by the Trust Indenture Act, waives any and all claims, in law and/or in equity, against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Debt Securities; (c) acknowledges and agrees that, upon the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority (i) the Trustee shall not be required to take any further directions from Holders under Section 5.12 of the Base Indenture and (ii) none of the Base Indenture, the Second Supplemental Indenture or the Debt Securities shall impose any duties upon the Trustee whatsoever with respect to the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority; and (d) shall be deemed to have authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Debt Securities to take any and all necessary action, if required, to implement the exercise of any UK Bail-in Power with respect to the Debt Securities as it may be imposed, without any further action or direction on the part of such Holder or beneficial owner of the Debt Securities, the Trustee or the Agent.

Notwithstanding clause (c) of the immediately preceding paragraph, if, following the completion of the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority, the Debt Securities remain outstanding (for example, if the exercise of the UK Bail-in Power results in only a partial write down of the principal of the Debt Securities), then the Trustee’s duties under the Indenture shall remain applicable with respect to the Debt Securities following such completion to the extent the Company and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the Indenture; provided, however, that notwithstanding the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority, there shall at all times be a trustee hereunder pursuant to, and in accordance with, Section 6.09 of the Base Indenture and the resignation and/or removal of the Trustee and the appointment of a successor trustee shall continue to be governed by Sections 6.10 and 6.11 of the Base Indenture, respectively, including to the extent no supplemental indenture or amendment to the Indenture is agreed upon pursuant to this paragraph.

 

A-9


In addition to the right to enter into supplemental indentures pursuant to Sections 9.01 and 9.02 of the Base Indenture, the Issuer and the Trustee may enter into one or more indentures supplemental to the Indenture to modify and amend the terms of the Indenture or the Debt Securities, without the further consent of any Holders, to the extent necessary to give effect to the exercise by the Relevant UK Resolution Authority of the UK Bail-in Power.

Upon the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Debt Securities, the Issuer shall provide a written notice to DTC as soon as practicable regarding such exercise of the UK Bail-in Power for purposes of notifying Holders and beneficial owners of the Debt Securities of such occurrence. The Issuer shall also deliver a copy of such notice to the Trustee for information purposes. The Issuer’s obligations to indemnify the Trustee in accordance with Section 6.07 of the Base Indenture shall survive any exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Debt Securities.

Upon the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority that results in the reduction or cancellation of all, or a portion, of the principal amount of this Global Security and/or the conversion of all, or a portion, of the principal amount of this Global Security into shares or other securities or other obligations of the Company or another person, the portion of the principal amount hereof so reduced, cancelled and/or converted shall be endorsed by the Registrar on Schedule B hereto. The principal amount hereof shall be reduced for all purposes by the amount so reduced, cancelled and/or converted.

ANY HOLDER OR BENEFICIAL OWNER OF THE DEBT SECURITIES THAT ACQUIRES THE DEBT SECURITIES IN THE SECONDARY MARKET AND ANY SUCCESSORS, ASSIGNS, HEIRS, EXECUTORS, ADMINISTRATORS, TRUSTEES IN BANKRUPTCY AND LEGAL REPRESENTATIVES OF ANY HOLDER OR BENEFICIAL OWNER OF THE DEBT SECURITIES SHALL BE DEEMED TO ACKNOWLEDGE, AGREE TO BE BOUND BY AND CONSENT TO THE SAME PROVISIONS SPECIFIED HEREIN TO THE SAME EXTENT AS THE HOLDERS OR BENEFICIAL OWNERS OF THE DEBT SECURITIES THAT ACQUIRE THE DEBT SECURITIES UPON THEIR INITIAL ISSUANCE, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO THE ACKNOWLEDGEMENT AND AGREEMENT TO BE BOUND BY AND CONSENT TO THE TERMS OF THE DEBT SECURITIES RELATED TO THE UK BAIL-IN POWER.

The Indenture and the Debt Securities may be amended and modified as provided in the Indenture.

All terms used in this Global Security and not otherwise defined shall have the meanings ascribed to them in the Indenture.

The Second Supplemental Indenture and the Debt Securities shall be governed by, and construed in accordance with, the laws of the State of New York, except that (i) Article Twelve of the Base Indenture (and the corresponding provisions in the Debt Securities), (ii) Section 5.01 of the Second Supplemental Indenture (and the corresponding provisions in the Debt Securities) and (iii) the authorization and execution by the Issuer of the Indenture and the Debt Securities (but, for the avoidance of doubt, no other Article or Section of the Indenture or provision in the Debt Securities, including with respect to the rights, duties, immunities and indemnities of the Trustee) shall be governed by, and construed in accordance with, the laws of England and Wales.

 

A-10


SCHEDULE A

EXCHANGES FOR DEFINITIVE DEBT SECURITIES

The following exchanges of parts of this Global Security for Definitive Debt Securities have been made:

 

Date Made

       

Principal amount

exchanged for Definitive

Debt Securities

       

Remaining principal

amount following such

exchange

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

A-11


SCHEDULE B

REDUCTION, CANCELLATION OR CONVERSION OF DEBT SECURITIES UPON THE

EXERCISE OF ANY UK BAIL-IN POWER BY THE RELEVANT UK RESOLUTION AUTHORITY

 

Date made

       

Principal amount

reduced, cancelled

and/or converted

       

Remaining principal

amount following

reduction, cancellation

and/or conversion

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

     

 

     

 

 

A-12

Exhibit 5.1

 

LOGO

Writer’s Direct Dial: +44 20 7614 2230

E-Mail: [email protected]

August 18, 2015

HSBC Holdings plc

8 Canada Square

London E14 5HQ

Ladies and Gentlemen:

We have acted as special U.S. counsel to HSBC Holdings plc, a public limited company incorporated under the law of England and Wales (the “Company”), in connection with the Company’s offering pursuant to a registration statement on Form F-3 (No. 333-202420) of U.S.$1,500,000,000 4.250% Subordinated Notes due 2025 (the “Notes”) to be issued under an indenture dated as of March 12, 2014 (as amended or supplemented through the date hereof, the “Base Indenture”), among the Company, The Bank of New York Mellon, as trustee (the “Trustee”), and HSBC Bank USA, National Association, as paying agent, registrar and exchange rate agent (“HSBC Bank USA”), as supplemented and amended by a second supplemental indenture dated as of August 18, 2015 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), among the Company, the Trustee and HSBC Bank USA. Such registration statement, as amended as of its most recent effective date (August 10, 2015), insofar as it relates to the Notes (as determined for purposes of Rule 430B(f)(2) under the Securities Act of 1933, as amended (the “Securities Act”)), but excluding the documents incorporated by reference therein, is herein called the “Registration Statement.”

In arriving at the opinions expressed below, we have reviewed the following documents:

 

  (a) the Registration Statement and the documents incorporated by reference therein;

 

  (b) an executed copy of the Base Indenture;

 

  (c) an executed copy of the Supplemental Indenture; and

 

LOGO


HSBC Holdings plc, p. 2

 

  (d) copies of the Notes in global registered form (the “Global Notes”) as executed by the Company and authenticated by the Trustee.

In addition, we have made such investigations of law as we have deemed appropriate as a basis for the opinion expressed below.

In rendering the opinion expressed below, we have assumed the authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies. In addition, we have assumed and have not verified the accuracy as to factual matters of each document we have reviewed.

Based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion that the Global Notes are valid, binding and enforceable obligations of the Company, entitled to the benefits of the Indenture; provided that we express no opinion as to the validity, binding effect or enforceability of (i) Article 12 of the Base Indenture (and the corresponding provisions in the Global Notes) or (ii) Section 5.01 of the Supplemental Indenture (and the corresponding provisions in the Global Notes), each of which is governed by the law of England and Wales.

Insofar as the foregoing opinions relate to the validity, binding effect or enforceability of any agreement or obligation of the Company, (a) we have assumed that the Company and each other party to such agreement or obligation has satisfied those legal requirements that are applicable to it to the extent necessary to make such agreement or obligation enforceable against it (except that no such assumption is made as to the Company regarding matters of the federal law of the United States of America or the law of the State of New York that in our experience normally would be applicable to general business entities with respect to such agreement or obligation), (b) such opinions are subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general principles of equity and (c) such opinions are subject to the effect of judicial application of foreign laws or foreign governmental actions affecting creditors’ rights.

We express no opinion as to the subject matter jurisdiction of any United States federal court to adjudicate any action relating to the Notes where jurisdiction based on diversity of citizenship under 28 U.S.C. § 1332 does not exist.

The foregoing opinions are limited to the federal law of the United States of America and the law of the State of New York. With respect to matters governed by the law of England and Wales, we have relied on our opinion dated August 18, 2015, as English counsel to the Company, which has been filed as Exhibit 5.2 to the Company’s Form 6-K dated August 18, 2015.


HSBC Holdings plc, p. 3

 

We hereby consent to the incorporation by reference of this opinion in the Registration Statement and the use of our name in the prospectus constituting a part of the Registration Statement and the prospectus supplement dated August 18, 2015 related to the Notes under the heading “Legal Opinions.” In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Securities and Exchange Commission thereunder.

 

Very truly yours,

 

CLEARY GOTTLIEB STEEN & HAMILTON LLP

By:  

/s/ David I. Gottlieb

  David I. Gottlieb, a Partner

Exhibit 5.2

 

LOGO

Writer’s Direct Dial: +44 (0) 207 614 2254

E-Mail: [email protected]                    

August 18, 2015

HSBC Holdings plc

8 Canada Square

London E14 5HQ

Ladies and Gentlemen:

We have acted as special English solicitors to HSBC Holdings plc, a public limited company incorporated under the law of England and Wales (the “Company”), in connection with the Company’s offering pursuant to a registration statement on Form F-3 (No. 333-202420) of U.S.$1,500,000,000 4.250% Subordinated Notes due 2025 (the “Notes”) to be issued under an indenture dated as of March 12, 2014 (as amended or supplemented through the date hereof, the “Base Indenture”), among the Company, The Bank of New York Mellon, as trustee (the “Trustee”), and HSBC Bank USA, National Association, as paying agent, registrar and exchange rate agent (“HSBC Bank USA”), as supplemented and amended by a second supplemental indenture dated as of August 18, 2015 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), among the Company, the Trustee and HSBC Bank USA. Such registration statement, as amended as of its most recent effective date (August 10, 2015), insofar as it relates to the Notes (as determined for purposes of Rule 430B(f)(2) under the Securities Act of 1933, as amended (the “Securities Act”)), but excluding the documents incorporated by reference therein, is herein called the “Registration Statement.”

In arriving at the opinions expressed below, we have reviewed the following documents:

 

  (a) the Registration Statement and the documents incorporated by reference therein;

 

  (b) an executed copy of the Terms Agreement dated August 10, 2015 among the Company and the several underwriters named therein, which attaches and incorporates therein the Underwriting Agreement (the “Terms Agreement”);

 

LOGO


HSBC Holdings plc, p. 2

 

  (c) an executed copy of the Base Indenture;

 

  (d) an executed copy of the Supplemental Indenture;

 

  (e) copies of the Notes in global registered form (the “Global Notes”) as executed by the Company and authenticated by the Trustee; and

 

  (e) a certificate dated August 10, 2015 of the Secretary of the Company (the “Secretary’s Certificate”) having annexed thereto and certified as true, complete and up-to-date copies the following documents:

 

  (i) the Memorandum and Articles of Association of the Company (the “Articles of Association”); and

 

  (ii) the resolution passed at the Meeting of the Company’s Board of Directors held on January 30, 2015.

In this opinion letter, the Terms Agreement, the Indenture and the Global Notes are referred to collectively as the “Transaction Documents” or each individually as a “Transaction Document.”

In rendering the opinions expressed below we have assumed and not verified:

 

  (a) the genuineness of all signatures, stamps and seals, the authenticity and completeness of all documents supplied to us and the conformity to the originals of all documents supplied to us as photocopies or facsimile or electronic copies;

 

  (b) that, where a document has been examined by us in draft, specimen or certificated form, it has been or will be executed in the form of that draft, specimen or certificate;

 

  (c) that each of the Transaction Documents has been or will be duly authorised, executed and delivered by each of the parties to such Transaction Documents (other than the Company) and each such party (other than the Company) has the power, capacity and authority to execute, deliver and perform its obligations contained in each of the Transaction Documents to which it is a party;

 

  (d) the absence of any other arrangements between any of the parties to any of the Transaction Documents which modify or supersede any of the terms of any of the Transaction Documents;


HSBC Holdings plc, p. 3

 

  (e) the accuracy as to factual matters of each document we have reviewed, including, without limitation, the accuracy of the representations and warranties contained in the Underwriting Agreement other than those contained in Sections 1(a)(viii), 1(b)(i), 1(b)(ii) and 1(b)(v), the compliance by each of the parties thereto with their respective obligations under the Transaction Documents;

 

  (f) that no law of any jurisdiction outside England and Wales would render the execution, delivery, issue or performance of the terms of the Transaction Documents illegal or ineffective and that, insofar as any obligation under the Transaction Documents falls to be performed in any jurisdiction other than England and Wales, its performance will not be illegal or ineffective by virtue of the laws of that jurisdiction;

 

  (g) that any party or prospective party to the Transaction Documents which is subject to the supervision of any regulatory authority in the United Kingdom has complied and will comply with the requirements of such regulatory authority in connection with the offering and sale of the Notes;

 

  (h) that each of the parties to the Transaction Documents has fully complied with its obligations under all applicable money laundering legislation;

 

  (i) that the binding effect of the Transaction Documents on the parties thereto is not affected by duress, undue influence or mistake, and no document has been entered into by any of the parties thereto in connection with any unlawful activity;

 

  (j) that all consents, approvals, notices, filings and registrations which are necessary under any applicable laws or regulations (other than laws or regulations of the United Kingdom) in order to permit the execution, delivery or performance of the Transaction Documents have been or will be duly made or obtained;

 

  (k) that there are no provisions of the laws of any jurisdiction outside England and Wales that would have any implication for the opinions we express and that, insofar as the laws of any jurisdiction outside England and Wales may be relevant to this opinion letter, such laws have been and will be complied with;

 

  (l)

that, save for Article 12 (Subordination of Debt Securities) of the Base Indenture (and the corresponding provisions in the Global Notes), Section 5.01 (Agreement with Respect to the Exercise of the UK Bail-in Power ) of the Supplemental Indenture and the authorisation and execution by the Company of the Indenture and the Global Notes, which are expressed to be governed by the law of England and Wales, each of the Transaction


HSBC Holdings plc, p. 4

 

  Documents constitutes legal, valid and binding obligations of each of the parties thereto enforceable in accordance with its terms under all applicable laws (including the laws of the State of New York, by which the Transaction Documents are expressed to be governed);

 

  (m) that the choice of the laws of England and Wales to govern Article 12 (Subordination of Debt Securities) of the Base Indenture and Section 5.01 (Agreement with Respect to the Exercise of the UK Bail-in Power) of the Supplemental Indenture (and the corresponding provisions in the Global Notes) was freely made in good faith by the respective parties and there is no reason for avoiding such choice on the grounds of public policy;

 

  (n) that each of the parties to the Transaction Documents has complied with all applicable provisions of Directive 2003/71/EC of the European Parliament, as amended (the “Prospectus Directive”) as it applies and as implemented in the United Kingdom, the Financial Services Act 2012, the Financial Services and Markets Act 2000, as amended (“FSMA”), and any applicable secondary legislation made under it with respect to anything done by any of them in relation to the Notes in, from or otherwise involving the United Kingdom (including Sections 19 (carrying on a regulated activity), 21 (financial promotion), 85 (public offers) and 118 (market abuse) of FSMA);

 

  (o) that the information relating to the Company disclosed by our searches on August 18, 2015 at Companies House at their website at www.companieshouse.gov.uk and by telephone at the Central Registry of Winding Up Petitions at the Companies Court in London in relation to the Company was then complete, up to date and accurate and has not since then been materially altered and that such searches did not fail to disclose any material information which had been delivered for registration but did not appear on the website or on the relevant file in London at the time of our search, and that such oral disclosures did not fail to disclose any material information or any petition for an administration order, dissolution or winding-up order in respect of the Company that has been presented in England and Wales;

 

  (p) that the Board Resolution, which authorises the issuance of the Notes by the Company, including pursuant to the Transaction Documents, was duly and validly passed, is a true record of the proceedings of the meeting, is in full force and effect and has not been amended, revoked or superseded;

 

  (q) that each director of the Company has disclosed any interest which he may have in the transactions contemplated by each of the Transaction Documents in accordance with the provisions of the Companies Act 1985 and the Companies Act 2006 and the Articles of Association, and that none of the relevant directors of the Company have any interest in such transactions except to the extent permitted by the Articles of Association;


HSBC Holdings plc, p. 5

 

  (r) that the execution and delivery of each of the Transaction Documents by the Company and the exercise of its rights and performance of its obligations thereunder will (i) materially benefit the Company and that the directors of the Company acted in good faith and in the interests of the Company in approving each of the Transaction Documents and the transactions contemplated thereby; and (ii) will not conflict with, or result in a breach of, or constitute a default under, or result in the creation of any mortgage, charge or security interest upon any property or assets of the Company or its subsidiary undertakings under (A) any agreement to which it is a party or to which any of its properties may be subject or (B) any existing applicable law, rule, regulation, judgment, order or decree of any government, governmental instrumentality or court, having jurisdiction over the Company or its subsidiary undertakings or any of its properties; and

 

  (s) that any limit on borrowings to which the Company is subject has not been exceeded, and that the entry into the Transaction Documents will not cause any such limit on borrowings to be exceeded.

Based on the foregoing, and subject to the further qualifications and limitations set forth below, it is our opinion that:

1. The Company has been duly incorporated in and registered as a public limited company under the laws of England and Wales. A search of the records of the Registrar of Companies as made public through the www.companieshouse.gov.uk website on August 18, 2015 and an oral enquiry made to the Central Registry of Winding up Petitions at the Companies Court at approximately 10:15 AM BST on August 18, 2015 revealed no petition, order or resolution for the winding up of the Company and no petition for, and no notice of appointment of, a receiver or administrator, provided that:

 

  (a) the searches with Companies House referred to above are not conclusively capable of revealing whether or not (i) a winding up order has been made in respect of a company or a resolution passed for the winding up of a company, or (ii) an administration order has been made in respect of a company, or (iii) a receiver, administrative receiver, administrator, liquidator or similar officer has been appointed in respect of a company, since notice of these matters might not be filed with Companies House immediately and, when filed, might not be made available through the website or entered on the files of Companies House relating to insolvency details with respect to the relevant company immediately. In addition, such searches are not capable of revealing, prior to the making of the relevant order, whether or not a winding-up petition or a petition for an administration order has been presented; and


HSBC Holdings plc, p. 6

 

  (b) the enquiry at the Central Registry of Winding up Petitions at the Companies Court referred to above relates only to a compulsory winding up and is not capable of revealing conclusively whether or not a winding up petition in respect of a compulsory winding up has been presented since details of the petition may not have been entered on the records of the Central Registry of Winding up Petitions immediately or, in the case of a petition presented to a County Court, may not have been notified to the Central Registry and entered on such records at all, and the response to an enquiry only relates to the period of six months prior to the date when the enquiry was made. We have not made enquiries of any County Court as to whether a petition for the appointment of an administrator has been presented to, or an administration order has been made by, any County Court against the Company.

2. The Company possesses the corporate power to enter into and perform its obligations under each of the Base Indenture, the Supplemental Indenture and the Global Notes.

3. The Base Indenture and the Supplemental Indenture have been duly authorised, executed and delivered by the Company.

4. The Global Notes have been duly authorised, issued, executed and delivered by the Company, and, when delivered in accordance with the Terms Agreement, the obligations assumed by the Company under Article 12 (Subordination of Debt Securities) of the Base Indenture (and the corresponding provisions in the Global Notes), constitute valid, binding and enforceable obligations of the Company.

The opinions set out above are limited to the law of England and Wales in force as at the date of this opinion letter, as currently applied by the courts in England and Wales, and are given on the basis that this opinion letter will be governed by and construed in accordance with the law of England and Wales.


HSBC Holdings plc, p. 7

 

We hereby consent to the incorporation by reference of this opinion in the Registration Statement and the use of our name in the prospectus constituting a part of the Registration Statement and the prospectus supplement dated August 10, 2015 related to the Notes under the heading “Legal Opinions.” In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Securities and Exchange Commission thereunder.

 

Very truly yours,
CLEARY GOTTLIEB STEEN & HAMILTON LLP
By  

/s/ Simon Ovenden

  Simon Ovenden, a Partner


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