HSBC Bank Canada intends to file an amended and restated prospectus supplement for the previously announced offering of Non-Cumulative 5-Year Rate Reset Class 1 Preferred Shares Series E, the bank said Wednesday.

The amendment is a result of ratings action announced on March 31 by Standard and Poor’s on the hybrid capital securities of over 60 European financial institutions, including the bank’s parent company, HSBC Holdings plc. The S&P ratings of the Preferred Shares Series E of ‘P-1(Low)’ and ‘A’ under S&P’s Canadian and Global Preferred Share Rating scales, respectively, are among the highest of the major Canadian banks.

The bank and a syndicate of investment dealers led by HSBC Securities (Canada) Inc. and Scotia Capital Inc. intend to enter into an agreement that will amend in certain respects the underwriting agreement they signed on March 24. The size of the offering will be unchanged at 7 million shares at a price of $25 a share, for gross proceeds of $175 million. The expected closing date for the offering, previously scheduled for March 31, will be amended to April 8.

HSBC Bank Canada will grant the Underwriters the option to purchase up to an additional 3 million Preferred Shares Series E at the issue price. Should the Underwriters’ Option be fully exercised, the total gross proceeds of the financing will be $250 million.

The Preferred Shares Series E will entitle the holders to receive non-cumulative preferential fixed quarterly cash dividends of 41.25¢ a share, to yield 6.6% annually for the initial period ending June 30, 2014. Thereafter, the dividend rate will reset every five years at a rate equal to 4.85% over the then five-year Government of Canada Bond Yield. Subject to regulatory approval, on June 30, 2014 and on June 30 every five years thereafter, the bank may redeem the Preferred Shares Series E in whole or in part at par.

Based on the anticipated closing date of April 8, the first dividend on the Preferred Shares Series E will be payable on June 30, 2009 in the amount of 37.62¢ a share.

Holders of the Preferred Shares Series E have the right to convert all, or any part of, their shares into Non-Cumulative Floating Rate Class 1 Preferred Shares Series F on June 30, 2014, and on June 30 every five years thereafter. Holders of the Preferred Shares Series F will be entitled to receive non-cumulative preferential floating rate quarterly cash dividends equal to the then three-month Government of Canada Treasury Bill Rate plus 4.85%.

The net proceeds from the offering will be used for general corporate purposes and to enhance the bank’s Tier 1 capital base.

IE