(Bloomberg) -- HSBC Holdings Plc has booked a $300 million hit on a legacy capital issue that it decided to repay, the bank reported on Tuesday in what was otherwise a better-than-expected third-quarter set of results.
The lender’s net interest income of $10.6 billion was dragged down by the early redemption, marking the first loss due to so-called notable items in at least five quarters, according to a presentation to investors.
The $900 million issue will be repaid later this week at nearly 130% of face value, according to data compiled by Bloomberg.
The hit highlights how expensive it can be to retire certain instruments that no longer count as core capital following rules introduced after the global financial crisis. Some remain in banks’ books decades after issuance.
In September, HSBC announced it was repaying a preferred security issued back in 2000, triggering the biggest daily jump in 14 years.
A similar issue, denominated in British pounds and issued in 2003, remains outstanding and is indicated at about 105 pence on the pound, based on data compiled by Bloomberg.
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