--Eleni Himaras
HSBC Bank (China) has deregistered the credit risk mitigation warrant it issued at the end of last year on a five-year bond issued by Petro China Company Ltd. This is the first time one of these instruments has been pulled before maturity, according to market watchers.
HSBC is buying back the instrument and so no longer offering protection on the underlying obligation, according to a notice filed on the National Association of Financial Market Institutional Investors Web site.
The CRMW was set to expire on Dec. 27, 2011. The filing offered no reason for the deregistration and an HSBC spokesman did not immediately return calls and e-mails for comment.
According to an HSBC press release from December, HSBC became the first foreign firm to issue a CRMW on Dec. 24. “The warrant issued by HSBC China, providing default protection on a five-year bond issued by Petro China Company Limited, offers protection for one year, with a face value totaling 10 million yuan (US$1.5 million),” the release reads.