Obbligazione HSBC Premier 5.862% ( XS0189704140 ) in GBP

HSBC Premier

100 GBP ▲

Regno Unito

XS0189704140 ( in GBP )

5.862% per anno ( pagato 1 volta l'anno)

perpetue

Prospetto opuscolo dell'obbligazione HSBC XS0189704140 en GBP 5.862%, scadenza perpetue

1 000 GBP

300 000 000 GBP

07/04/2026 ( In 85 giorni )

HSBC Holdings plc è una banca multinazionale britannica con sede a Londra, operante in oltre 60 paesi e territori nel mondo.

The Obbligazione issued by HSBC Premier ( United Kingdom ) , in GBP, with the ISIN code XS0189704140, pays a coupon of 5.862% per year.
The coupons are paid 1 time per year and the Obbligazione maturity is perpetue

HSBC
HSBC Bank Capital Funding (Sterling 2) L.P.
(established in Jersey as a limited partnership under the Limited Partnerships (Jersey) Law 1994)
£300,000,000
5.862% Non-cumulative Step-up Perpetual Preferred Securities
having the benefit of a subordinated guarantee of
HSBC Bank plc
(incorporated with limited liability under the laws of England and Wales with registered number 14259)
Issue Price: £1,000 per Preferred Security
The £300,000,000 5.862% Non-cumulative Step-up Perpetual Preferred Securities, (the "Preferred Securities") each issued for a capital
contribution of £1,000 (referred to herein as the "nominal amount"), representing limited partnership interests in HSBC Bank Capital
Funding (Sterling 2) L.P., (the "Issuer"), will be issued on 7 April 2004 (the "Issue Date"). The Preferred Securities will entitle investors,
subject to certain conditions described herein, to receive non-cumulative cash distributions ("Distributions") annually in arrear on 7
April in each year until 7 April 2020 and thereafter semi-annually in arrear on 7 April and 7 October in each year. Distributions shall
accrue from (and including) the Issue Date to (but excluding) 7 April 2020 at a fixed rate per annum of 5.862% and semi-annually in
arrear from (and including) 7 April 2020, at a floating rate per annum equal to the sum of 1.85% and six-month LIBOR for the relevant
Distribution Period (as defined herein). The first Distribution will, if payable, be paid on 7 April 2005, and will be calculated in respect of
the period from (and including) 7 April 2004 to (but excluding) 7 April 2005. See "Description of the Preferred Securities 
Distributions".
The Issuer is a Jersey limited partnership and is not a legal entity separate from its partners. All obligations of the Issuer to make
payments in respect of the Preferred Securities are guaranteed on a subordinated basis pursuant to a guarantee dated 7 April 2004 (the
"Guarantee") given by HSBC Bank plc (the "Bank"). See "Description of the Guarantee".
The Preferred Securities are perpetual securities and not subject to any mandatory redemption provisions. The Preferred Securities may
be redeemed, at the option of HSBC Bank (General Partner) Limited, a wholly owned Jersey incorporated subsidiary of the Bank, as
general partner of the Issuer (the "General Partner"), on 7 April 2020 or on each Distribution Date thereafter, in whole but not in part
each at its nominal amount, subject to satisfaction of the Redemption Conditions (each as defined herein). The Preferred Securities are
also redeemable, subject to satisfaction of certain conditions, in whole but not in part, at any time following the occurrence of a Tax
Event or a Regulatory Event (each as defined herein). Under existing regulations, neither the Issuer nor the Bank nor any of its
subsidiaries may redeem or purchase any Preferred Securities unless the Financial Services Authority, or any successor organisation
thereto in the United Kingdom (the "FSA"), has given its prior written consent. See "Description of the Preferred Securities 
Redemption and Purchase". These requirements and restrictions do not affect the ability of the Bank and its subsidiaries and affiliates
to engage in market-making activities in relation to the Preferred Securities.
In the event of the dissolution or winding-up of the Issuer, holders of Preferred Securities will be entitled, subject to satisfaction of
certain conditions, to receive a Liquidating Distribution (as defined herein). See "Description of the Preferred Securities Liquidating
Distributions". Upon the occurrence of a Substitution Event (as defined herein) or, subject to certain conditions, at the option of the
General Partner following a Tax Event or Regulatory Event, the Preferred Securities may be substituted by the Substitute Preference
Shares (as defined herein). If any Preferred Securities are outstanding on 7 April 2049 and no notice to redeem such Preferred
Securities on or before 7 April 2049 has been given, the Preferred Securities will be substituted by the Substitute Preference Shares.
See "Description of the Preferred Securities Substitution by Substitute Preference Shares".
The Preferred Securities are expected to be assigned on issue a rating of "A" by Standard & Poor's Ratings Services, a Division of The
McGraw Hill Companies Inc., "A1" by Moody's Investors Service Limited and "AA-" by Fitch Ratings. A credit rating is not a
recommendation to buy, sell or hold securities and may be subject to revisions, suspension or withdrawal at any time by the relevant
rating organisation.
Application has been made to list the Preferred Securities on the Luxembourg Stock Exchange (the "Luxembourg Stock Exchange").
See "Investment Considerations" for a discussion of certain factors that should be considered by prospective investors.
The Preferred Securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the
"Securities Act") or any US State Securities Laws. The Preferred Securities are being offered outside the United States by the Managers
(as defined in "Subscription and Sale" below) in accordance with Regulation S under the Securities Act ("Regulation S"), and may not
be offered or sold within the United States or to, or for the account or benefit of, US persons except pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of the Securities Act.
The Preferred Securities will be evidenced by a single global certificate in registered form (the "Global Certificate") registered in the
name of a nominee of, and deposited with, a common depositary for Euroclear Bank, S.A./N.V. as operator of the Euroclear System
("Euroclear") and Clearstream Banking, société anonyme, Luxembourg ("Clearstream, Luxembourg"). Definitive certificates evidencing
Preferred Securities will only be available in certain limited circumstances. See "Summary of Provisions relating to the Preferred
Securities while in Global Form".
HSBC Bank plc
Credit Suisse First Boston
Goldman Sachs International
Landesbank Baden-Württemberg
Morgan Stanley

RBC Capital Markets
Dated: 1 April 2004

The General Partner, acting on behalf of the Issuer, accepts responsibility for the information
contained in this Offering Circular (other than the Bank Group Information (as defined below)).
To the best of the knowledge and belief of the General Partner (which has taken all reasonable
care to ensure that such is the case) the information contained in this Offering Circular is true
and accurate in all material respects and is not misleading, the opinions and intentions
expressed in this Offering Circular are honestly held and there are no other facts the omission
of which makes this Offering Circular as a whole or any such information or the expression of
any such opinion or intention misleading. In addition, the Bank accepts responsibility for all
information contained in this Offering Circular set out under the sections entitled
"Consolidated Capitalisation and Indebtedness of the Bank", "Description of the Bank",
"Description of the Guarantee", "Description of the Substitute Preference Shares" and Annex
A HSBC Bank plc 2003 Annual Report and Accounts (together, the "Bank Group
Information"). To the best of the knowledge and belief of the Bank (which has taken all
reasonable care to ensure that such is the case), the Bank Group Information is in accordance
with the facts and does not omit anything likely to affect the import of such information.
The term "the Bank Group" has the meaning given in "Description of the Preferred Securities".
Any reference in this Offering Circular to an action taken by the Issuer shall be taken to mean
an action taken by the General Partner on behalf of the Issuer. The term "the HSBC Group"
means HSBC Holdings plc together with its subsidiary undertakings.
Neither the Issuer nor the Bank has authorised the making or provision of any representation
or information regarding the Issuer, the Bank or the Preferred Securities other than as
contained in this Offering Circular or as approved for such purpose by the Issuer and the Bank.
Any such representation or information should not be relied upon as having been authorised
by the Issuer, the General Partner, the Bank or the Managers.
Neither the delivery of this Offering Circular nor the offering, sale or delivery of any Preferred
Securities shall in any circumstances create any implication that there has been no adverse
change, or any event reasonably likely to involve any adverse change, in the condition
(financial or otherwise) of the Issuer or the Bank since the date of this Offering Circular.
Prospective investors should inform themselves as to the legal requirements and tax
consequences within the countries of their residence and domicile for or of the acquisition,
holding or disposal by them of Preferred Securities and any foreign exchange restrictions that
might be relevant to them. This Offering Circular does not constitute an offer of or an invitation
by or on behalf of the Issuer or any of its partners, or the Managers to subscribe for or
purchase any of the Preferred Securities.
Investors should satisfy themselves that they understand all the risks associated with making
investments in the Preferred Securities. If a prospective investor is in any doubt whatsoever as
to the risks involved in investing in the Preferred Securities, he should consult his professional
advisers. This Offering Circular does not constitute investment advice or a recommendation to
buy, subscribe for or underwrite any Preferred Securities by the Issuer or any of its partners,
the Bank or the Managers.
EACH PURCHASER OF THE PREFERRED SECURITIES MUST COMPLY WITH ALL APPLICABLE
LAWS AND REGULATIONS IN FORCE IN ANY JURISDICTION IN WHICH IT PURCHASES,
OFFERS OR SELLS THE PREFERRED SECURITIES OR POSSESSES OR DISTRIBUTES THIS
OFFERING CIRCULAR AND MUST OBTAIN ANY CONSENT, APPROVAL OR PERMISSION
REQUIRED BY IT FOR THE PURCHASE, OFFER OR SALE BY IT OF THE PREFERRED
SECURITIES UNDER THE LAWS AND REGULATIONS IN FORCE IN ANY JURISDICTION TO
WHICH IT IS SUBJECT OR IN WHICH IT MAKES SUCH PURCHASES, OFFERS OR SALES, AND
NONE OF THE GENERAL PARTNER, THE ISSUER, THE BANK OR THE MANAGERS SHALL
HAVE ANY RESPONSIBILITY THEREFOR.
Investors in the Preferred Securities will be deemed to have represented that they do not own,
directly or indirectly, 10% or more of the ordinary shares of the Bank. If at any time the General
Partner becomes aware that an investor in the Preferred Securities owns, directly or indirectly,
2

10% or more of the ordinary shares of the Bank, it will, on behalf of the Issuer, have the right
to suspend payment of Distributions in respect of such Investor's Preferred Securities.
Investors in the Preferred Securities are required to provide written notice to the General
Partner on behalf of the Issuer if at any time any such holder of Preferred Securities owns,
directly or indirectly, 10% or more of the ordinary shares of the Bank.
The distribution of this Offering Circular and the offering of the Preferred Securities in certain
jurisdictions may be restricted by law. Persons into whose possession this Offering Circular
comes are required by the General Partner, the Issuer, the Bank and the Managers to inform
themselves about, and to observe, any such restrictions. In particular, there are restrictions on
the distribution of this Offering Circular and the offer and sale of the Preferred Securities, in
the United States and the United Kingdom. See "Subscription and Sale".
No action has been taken to permit a public offering of the Preferred Securities in any
jurisdiction where action would be required for such purpose. Accordingly, the Preferred
Securities may not be offered or sold, directly or indirectly, and this Offering Circular may not
be distributed in any jurisdiction, except in accordance with the legal requirements applicable
in that jurisdiction. In particular, the Preferred Securities have not been, and will not be,
registered under the Securities Act and are subject to United States tax law requirements.
Subject to certain exceptions, the Preferred Securities may not be offered, sold or delivered
within the United States or to US persons. A further description of certain restrictions of the
offering and sale of the Preferred Securities and on the distribution of this Offering Circular is
given under "Subscription and Sale".
The Jersey Financial Services Commission has given and has not withdrawn its consent under
Article 8 of the Control of Borrowing (Jersey) Order 1958 to the creation by the Issuer of the
Preferred Securities. The Jersey Financial Services Commission is protected by the Borrowing
(Control) (Jersey) Law 1947, as amended, against liability arising from the discharge of its
functions under that Law.
Nothing in this Offering Circular or anything communicated to Holders of, or investors in, the
Preferred Securities (or any such potential Holders or investors) by the General Partner is
intended to constitute or should be construed as advice on the merits of the purchase of, or
subscription for, the Preferred Securities or the exercise of any rights attached thereto for the
purposes of the Financial Services (Jersey) Law 1998, as amended.
An investment in the Preferred Securities is only suitable for financially sophisticated investors
who are capable of evaluating the merits and risks of such investment and who have sufficient
resources to be able to bear any losses which may result from such an investment.
This Offering Circular is for distribution only to persons who (i) are outside the United
Kingdom, (ii) investment professionals falling within article 14(5) of the Financial Services and
Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 (the
"Promotion of Collective Investment Schemes Order") and article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2001 (the "Financial Promotion
Order") who have professional experience of participating in unregulated schemes and of
matters relating to investments and (iii) persons falling within article 22(2) of the Promotion of
Collective Investment Schemes Order and article 49(2) of the Financial Promotion Order (all
such persons together being referred to as "relevant persons"). This Offering Circular is
directed only at relevant persons and must not be acted on or relied on by persons who are
not relevant persons. Any investment or investment activity to which this Offering Circular
relates is available only to relevant persons and will be engaged in only with relevant persons.
The Managers are acting for HSBC Bank Capital Funding (Sterling 2) L.P. in connection with the
issue of the Preferred Securities and no-one else and will not be responsible to any person
other than HSBC Bank Capital Funding (Sterling 2) L.P. for providing the protections afforded to
clients of the Managers, nor for providing advice in relation to the issue of the Preferred
Securities. HSBC Bank plc can be contacted at 4th Floor, 8 Canada Square, London E14 5HQ.
3

FORWARD-LOOKING STATEMENTS
This Offering Circular contains various forward-looking statements regarding events and
trends that are subject to risks and uncertainties that could cause the actual results and
financial position of the Bank or the Bank Group to differ materially from the information
presented herein. When used in this Offering Circular, the words "estimate", "project",
"intend", "anticipate", "believe", "expect", "should" and similar expressions, as they are
related to the Bank Group and its management, are intended to identify such forward-looking
statements. You should not place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Bank Group does not undertake any obligation to
publicly release the result of any revisions to these forward-looking statements to reflect any
events or circumstances after the date hereof or to reflect the occurrence of unanticipated
events.
PRESENTATION OF FINANCIAL INFORMATION
In this Offering Circular, references to "e" and "euro" are to the single currency introduced at
the start of the Third Stage of the European Economic and Monetary Union pursuant to the
Treaty establishing the European Community, as amended, references to "£", "sterling" and
"pounds sterling" are to the lawful currency of the United Kingdom and references to "US$"
and "US dollars" are to the lawful currency of the United States.
IN CONNECTION WITH THE OFFERING, HSBC BANK PLC IN ITS CAPACITY AS LEAD
MANAGER, (THE "STABILISING MANAGER") (OR ANY PERSON ACTING FOR IT) MAY OVER-
ALLOT OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF
THE PREFERRED SECURITIES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE
PREVAIL FOR A LIMITED PERIOD. HOWEVER, THERE MAY BE NO OBLIGATION ON HSBC
BANK PLC OR ANY AGENT OF IT TO DO THIS. SUCH STABILISING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME AND MUST BE BROUGHT TO AN END AFTER A LIMITED
PERIOD. SUCH STABILISING SHALL BE IN COMPLIANCE WITH ALL APPLICABLE LAWS,
REGULATIONS AND RULES.
4

TABLE OF CONTENTS
Summary of the Offering ..................................................................................................
6
Use of Proceeds ..................................................................................................................
16
Investment Considerations ................................................................................................
17
HSBC Bank Capital Funding (Sterling 2) L.P.....................................................................
19
Description of the Bank ......................................................................................................
21
Consolidated Capitalisation and Indebtedness of the Bank ..........................................
23
Description of the Preferred Securities ............................................................................
25
Summary of Provisions relating to the Preferred Securities in Global Form ..............
42
Description of the Guarantee ............................................................................................
43
Description of the Substitute Preference Shares ............................................................
50
Taxation................................................................................................................................
55
Subscription and Sale ........................................................................................................
58
General Information............................................................................................................
60
Annex A
HSBC Bank plc Annual Report and Accounts 2003................................
A-1
5

SUMMARY OF THE OFFERING
The following is qualified in its entirety, by the more detailed information included elsewhere
in this Offering Circular. Capitalised terms not otherwise detailed in this summary have the
meaning given to them in "Description of the Preferred Securities".
Issuer .
.
.
.
.
.
.
.
HSBC Bank Capital Funding (Sterling 2) L.P., a limited
partnership established in Jersey and registered under
the Limited Partnerships (Jersey) Law, 1994 (the "Law").
The Issuer will be consolidated in the group accounts of
HSBC Bank plc (the "Bank"). The general partner of the
Issuer is HSBC Bank (General Partner) Limited (the
"General Partner"), a wholly owned Jersey incorporated
subsidiary of the Bank.
Guarantor .
.
.
.
.
.
.
HSBC Bank plc.
Issue Details
.
.
.
.
.
.
£300,000,000 5.862% Non-cumulative Step-up Perpetual
Preferred Securities, each with a nominal amount of
£1,000, constituting limited partnership interests in the
Issuer (the "Preferred Securities").
The Bank will guarantee, on a subordinated basis, all
payments in respect of the Preferred Securities.
The Preferred Securities, together with the Guarantee,
are intended to provide investors with rights to income
and capital distributions and distributions upon
liquidation of the Bank that are equivalent to the rights
they would have had if they had purchased non-
cumulative perpetual preference shares of the Bank.
The total nominal amount of the Preferred Securities will
at issue be included in the tier 1 capital of the Bank.
Neither the Issuer nor any member of the Bank Group
will make or procure any payment to investors if such a
payment could not lawfully have been made had
investors held shares ranking pari passu with Substitute
Preference Shares of the Bank instead of the Preferred
Securities.
Income Distributions
.
.
.
.
Non-cumulative distributions (the "Distributions") will
accrue on the nominal amount of the Preferred
Securities (i) from (and including) 7 April 2004 (the
"Issue Date") to (but excluding) the First Optional
Redemption Date (as defined below) at a fixed rate per
annum of 5.862% payable annually in arrear, and (ii)
from and (including) the First Optional Redemption Date
for each successive six month period thereafter at a
floating rate per annum equal to the sum of 1.85% and
six-month LIBOR for such period payable semi-annually
in arrear subject in each case to "Limitations on
Payment" below.
See "Description of the Preferred Securities 
Distributions".
Distribution Dates .
.
.
.
.
Distributions will, if payable, be paid on 7 April in each
year beginning on 7 April 2005 up to and including 7
6

April 2020 and thereafter on 7 April and 7 October in
each year, the first such Distribution being calculated in
respect of the period from (and including) 7 April 2004 to
(but excluding) 7 April 2005. The date on which a
Distribution will, if payable, be paid is referred to as a
"Distribution Date". The period from (and including) the
Issue Date to (but excluding) the first Distribution Date
and each period from (and including) a Distribution Date
to (but excluding) the next succeeding Distribution Date
is referred to as a "Distribution Period".
Limitations on Payment
.
.
.
The Issuer will pay Distributions out of, and to the extent
of, its legally available resources. Distributions will not
be paid on the Preferred Securities in respect of any
Distribution Period on the next following Distribution
Date to the extent that:
(i)
on the relevant Distribution Date the Bank (a) is
prevented by applicable UK banking regulations or
other requirements from making payment in full
(A) of dividends or other distributions on its Parity
Obligations (as defined below) or (B) under the
Guarantee or (b) is unable to make such payment
of dividends or other distributions on its Parity
Obligations or under the Guarantee without
causing a breach of the FSA's capital adequacy
requirements from time to time applicable to the
Bank; or
(ii)
the amount of such Distribution (if paid in full),
together with the sum of any dividends and other
distributions on the Bank's Parity Obligations due
and payable on that Distribution Date or under the
Guarantee, would exceed the Adjusted
Distributable Reserves (as defined below) of the
Bank. No payment will be made by, or may be
claimed from, the Bank in respect of a Distribution
to the extent that it is not paid by reason of the
limitations described above.
See "Description of the Preferred Securities 
Distributions".
Dividend Stopper .
.
.
.
.
The Bank will covenant in the Guarantee that, if for any
single Distribution Period ending on or before the First
Optional Redemption Date or thereafter for any two
consecutive Distribution Periods, Distributions have not
been made in full, by reason of the limitations on
payment described above, it will not pay dividends or
other distributions in respect of its ordinary shares or
effect any repurchase or redemption in respect of its
ordinary shares or any other Bank securities or
obligations ranking junior to the Guarantee or
repurchase or redeem any Parity Obligations which are
securities until after the next following Distribution Date
on which a Distribution in respect of the Preferred
Securities is paid in full.
7

No Fixed Maturity .
.
.
.
.
The Preferred Securities are perpetual securities and
have no maturity date. The Preferred Securities may be
redeemed at the option of the General Partner in the
circumstances described under "Optional Redemption",
"Tax Call" and "Regulatory Call" below.
Optional Redemption .
.
.
.
The Preferred Securities are redeemable, in whole but
not in part and subject to paragraph 7.3 of "Description
of the Preferred Securities", the Law and the limitations
on redemption described below, at the option of the
General Partner on 7 April 2020 (the "First Optional
Redemption Date") or on each Distribution Date
thereafter at the Optional Redemption Price.
The Optional Redemption Price of each of the Preferred
Securities is an amount equal to its nominal amount.
See "Description of the Preferred Securities 
Redemption and Purchase".
Tax Call
.
.
.
.
.
.
.
The Preferred Securities are redeemable, in whole but
not in part and subject to paragraph 7.3 of "Description
of the Preferred Securities", the Law and the limitations
on redemption described below, at the option of the
General Partner at any time that a Tax Event has
occurred and is continuing, at the Tax Redemption Price.
Tax Redemption Price .
.
.
.
The "Tax Redemption Price" of each of the Preferred
Securities is an amount equal to its nominal amount
together with any accrued but unpaid Distribution in
respect of the Distribution Period (as defined above) in
which the redemption date falls.
See "Description of the Preferred Securities 
Redemption and Purchase".
Tax Event .
.
.
.
.
.
.
"Tax Event" means that, whether or not as a result of a
change in any law or regulation of the United Kingdom
or Jersey, or in any treaty to which the United Kingdom
or Jersey is a party, or in the official interpretation or
application of any law, regulation or treaty by any
relevant body in Jersey or the United Kingdom or any
action taken by any appropriate authority, there is more
than an insubstantial risk that (i) the Issuer or the
General Partner would be subject to more than a de
minimis amount of tax (except, in the case of the
General Partner only, for any such tax that would arise
as a result of (a) profits arising to it as a result of
payments received by it from the Issuer or (b) activities
(if any) carried on by it other than those permitted or
contemplated in the Partnership Agreement (as defined
under "HSBC Bank Capital Funding (Sterling 2) L.P.")) in
Jersey or the United Kingdom), (ii) payments to Holders
would be subject to deduction or withholding for or on
account of tax or would give rise to any obligation to
account for any tax in Jersey or the United Kingdom, (iii)
payments by the Bank in respect of the Subordinated
Note (as defined below) would be subject to deduction
or withholding for or on account of tax in the United
8

Kingdom or (iv) the Bank would not obtain relief for the
purposes of UK corporation tax for any payment of
interest in respect of the Subordinated Note.
Regulatory Call
.
.
.
.
.
The Preferred Securities are redeemable, in whole but
not in part and subject to paragraph 7.3 of "Description
of the Preferred Securities", the Law and the limitations
on redemption described below, at the option of the
General Partner at any time that a Regulatory Event (as
defined below) has occurred and is continuing, at the
Regulatory Event Redemption Price.
The "Regulatory Event Redemption Price" of each of the
Preferred Securities is an amount equal to, in the case of
a redemption on a date which is prior to the First
Optional Redemption Date, the higher of (i) its nominal
amount together with any accrued but unpaid
Distribution in respect of the Distribution Period in which
the redemption date falls and (ii) the Make Whole
Amount (as defined below) and, in the case of a
redemption on or after the First Optional Redemption
Date, its nominal amount together with any accrued but
unpaid Distribution in respect of the Distribution Period
in which the relevant redemption date falls.
See "Description of the Preferred Securities 
Redemption and Purchase".
Regulatory Event .
.
.
.
.
"Regulatory Event" means that for any reason, there is
more than an insubstantial risk that for the purposes of
the FSA's capital adequacy requirements applicable to
banks in the United Kingdom at that time, the Preferred
Securities may not be included in the tier 1 capital of the
Bank on both a solo basis and on a consolidated basis.
Substitution after a Regulatory
If a Regulatory Event or a Tax Event has occurred and is
Event or a Tax Event
.
.
.
.
continuing, as an alternative to redemption and at the
option of the General Partner, the Substitute Preference
Shares (as defined below) may (provided that
proceedings have not been commenced for the
liquidation, dissolution or winding up of the Bank in
England) be substituted for the Preferred Securities as if
the Regulatory Event or the Tax Event constituted a
Substitution Event.
Limitations on Redemption
.
.
The Preferred Securities may only be redeemed if (i) the
aggregate of the Bank's Adjusted Distributable Reserves
and the proceeds of any issue of Replacement Capital
made for the purpose of funding such redemption is at
least equal to the full amount payable on redemption,
and (ii) the prior consent of the FSA, if required, has
been obtained.
Make Whole Amount .
.
.
.
In respect of a Preferred Security, "Make Whole
Amount" means at any time prior to the First Optional
Redemption Date an amount equal to the sum of (i) the
present value of its nominal amount; and (ii) the present
value of each remaining scheduled Distribution to and
including the First Optional Redemption Date,
9

discounted from the First Optional Redemption Date or
the relevant Distribution Date, respectively, in each case
to the Early Redemption Date at a rate equal to the sum
of (x) 0.375% and (y) the Reference Rate (as defined
below).
Substitution Event .
.
.
.
.
A Substitution Event will occur if:
(i)
on the Distribution Date in April 2049 the Preferred
Securities (or any of them) are outstanding and no
notice has been given to redeem the then
outstanding Preferred Securities on or before the
Distribution Date in April 2049;
(ii)
the Bank's total capital ratio, calculated on a solo
basis and consolidated basis in accordance with
applicable UK bank capital adequacy regulations,
falls below the then minimum ratio required by
such regulations (currently 8%); or
(iii)
the Bank's board of directors in its sole discretion
has notified the FSA and the Issuer that it has
determined that (ii) above is expected to occur in
the near term.
Upon the occurrence of a Substitution Event and
provided that proceedings have not been commenced
for the liquidation, dissolution or winding up of the Bank
in England, the Preferred Securities will, as soon as
reasonably practicable thereafter, be substituted by the
Substitute Preference Shares.
See "Description of the Preferred Securities 
Substitution by Substitute Preference Shares".
Substitute Preference Shares
.
.
The Substitute Preference Shares will be fully-paid non-
cumulative redeemable perpetual preferred shares
issued by the Bank having economic terms which are in
all material respects equivalent to those of the Preferred
Securities and the Guarantee taken together. The Bank
will take all reasonable steps to procure that the
Substitute Preference Shares will at the relevant time be
admitted to listing on the Official List of the Financial
Services Authority (in its capacity as competent authority
for the purposes of Part IV of the Financial Services and
Markets Act 2000 (the "FSMA")) (the "UK Listing
Authority") and to trading on the London Stock
Exchange plc's market for listed securities (the "London
Stock Exchange") or another Recognised Stock
Exchange.
Rights upon Liquidation
.
.
.
In the event of the dissolution or winding up of the
Issuer, each investor will, subject to certain limitations,
be entitled to receive out of the assets of the Issuer
available for distribution the Liquidating Distribution.
The Liquidating Distribution will be made (i) before any
distribution of assets is made to the General Partner or
HSBC Preferential LP (UK), an unlimited liability
company incorporated in England and Wales and tax
10