March 24, 2014 / 1:21 PM / in 4 years

HSBC to seek investor OK to sell "CoCo" bonds

LONDON, March 24 (Reuters) - HSBC Holdings said it plans to ask its shareholders for permission to sell bonds that would convert into shares and bolster its capital if the bank hits trouble, giving it the option to join a growing group of banks issuing the securities.

Europe’s biggest bank said on Monday it would ask for approval at its annual shareholder meeting in May to be able to issue bonds that would convert into shares in certain circumstances, such as if its capital level fell below a certain level.

More European banks are issuing the instruments, dubbed “CoCos”, as they benefit from new regulatory capital treatment under European Union legislation. (Reporting by Steve Slater; Editing by Matt Scuffham)

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