STANCHART to Issue USD 1.00 Billion Perpetual AT1 Convertible Bonds with 7.00% Initial Coupon

Bulletin Express
05/29

Standard Chartered PLC (STANCHART) will raise USD 1.00 billion through the issuance of Fixed-Rate Resetting Perpetual Subordinated Contingent Convertible Securities (Additional Tier 1 capital, “AT1”) on 8 June 2026. The bonds, denominated in USD 200,000 and integral multiples of USD 1,000, carry an initial fixed coupon of 7.00% per annum until 8 December 2033, after which the rate resets every five years to the prevailing five-year U.S. Treasury yield plus a 2.672 percentage-point margin. Interest payments are fully discretionary and subject to solvency and distributable-items conditions; any unpaid coupons are cancelled rather than deferred.

The securities are perpetual, lack a fixed maturity, and may be redeemed at par from 8 June 2033 or on any subsequent reset date with prior regulatory approval. Early redemption is also permissible upon a Capital Disqualification Event or Tax Event. Conversion into ordinary shares is automatic if the Group’s Common Equity Tier 1 (CET1) ratio falls below 7.00%. The conversion price is set at USD 26.379 per share, implying issuance of up to 37.91 million new shares—about 1.69% of enlarged share capital—if the full USD 1.00 billion converts.

Net proceeds of approximately USD 991.50 million, after managers’ commissions, will be applied to general corporate purposes and to further bolster the Group’s regulatory capital position. The AT1 notes are expected to be rated Ba1 (Moody’s), BB+ (S&P) and BBB- (Fitch).

The securities will be listed on the London Stock Exchange’s International Securities Market, while any conversion shares will seek listings on both the Hong Kong Stock Exchange and the London Stock Exchange’s Main Market. At least six independent institutional investors will subscribe, under a syndicate led by Standard Chartered Bank, Barclays Capital, Morgan Stanley, SG Americas Securities and TD Securities.

The issuance utilises part of a shareholder-approved specific mandate permitting up to 15% of issued ordinary share capital to be allotted for contingent convertible securities through to August 2027.

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