HSBC runs 50-year €6 bln bond for France

HSBC Holdings plc has acted as joint lead manager and book-runner on a 50-year €6 billion transaction for France, making it the world's longest-maturity government bond ever issued.

The bond, which enables cheap borrowing costs because it locks in a low interest rate for half a century, was issued following a survey of 550 investors to better match demand.

The demand for the bond was high and this underpins the desire for longer-dated assets among institutional investors and could prompt similar issues from other European countries. France became the first G7 industrialised economy to issue a 50-year bond, extending the duration in the market from the 30-year segment.

This demand has been spurred by regulatory changes in many countries forcing pension funds to better match their assets to future liabilities.

Demand was initially driven by institutional investors including pension and insurance funds, which need longer dated assets to match their liabilities from an ageing population.

Eurozone government bond yields have fallen to record low levels in recent sessions, offering the government new funds at historically cheap levels. The timing of the issue was attractive to France. The bond will pay an annual interest of four per cent and was priced to yield 4.21 per cent.

The HSBC Group's global markets business ranks among the largest in the world. Operating through 86 treasury sites in more than 56 countries and territories, including Malta, with more than 3,600 dealing and support staff, the business combines sophisticated 24-hour global coverage and detailed knowledge of local markets.

HSBC is one of the leading financial institutions servicing the requirements of the world's central banks, corporations, institutional investors and other market participants.

"HSBC is also involved in the area of corporate, investment banking and markets in Malta. With the support and expertise of HSBC Group it can execute mandates across a full range of advisory and financing products, including advice on equity markets, corporate broking and debt capital markets. Customers can also be assisted and informed on the best way to raise capital in the local and international markets," said Charles Farrugia, director and head of corporate, investment banking and markets at HSBC Bank Malta plc.