HDFC Bank Limited has elected to exercise its call option on $1 billion of 3.7% Additional Tier 1 (AT1) Notes issued in August 2021. The bank will redeem all outstanding notes in full on August 25, 2026, the first available call date under the securities’ terms.
Bondholders to Receive Full Principal
The notes will be redeemed at 100% of the outstanding principal amount, together with accrued and unpaid interest or distributions due under the bond terms up to the applicable redemption date. The securities were issued under both Regulation S and Rule 144A structures and carry a 3.7% coupon.
The notes were originally issued on August 25, 2021, and the upcoming redemption marks the exercise of HDFC Bank’s contractual issuer call option. The bank said the redemption will be carried out in accordance with the applicable terms and conditions governing the securities.
$1B in Notes to Be Retired
The redemption covers the entire $1 billion outstanding principal amount of the AT1 notes. Following completion of the redemption, the rights and obligations associated with the bonds will generally cease, except for bondholders’ entitlement to receive the applicable redemption amount and any accrued payments specified under the terms.
The notes sold under Regulation S carry ISIN USY3119PFH74 and CUSIP Y3119PFH7, while those sold under Rule 144A carry ISIN US40415FAA93 and CUSIP 40415FAA9.
Capital Management Focus
The decision comes as HDFC Bank continues to manage its capital structure and funding profile. AT1 securities are designed to qualify as regulatory capital and typically contain issuer call features that allow banks to redeem them on specified dates, subject to the relevant terms and applicable requirements.
For investors, the redemption will remove the $1 billion issue from the bank’s outstanding capital market obligations. The move may also draw attention to HDFC Bank’s future funding strategy and the potential replacement of the securities with other forms of capital or debt financing.
HDFC Bank’s announcement provides bondholders with a clear timeline for repayment and confirms that the notes will be redeemed at par value on the first call date, along with applicable accrued payments.
