Lead Manager:

HSBC Securities (USA) Inc. (83.0%)

Co-Managers:

ABN AMRO Incorporated (1.0%)

Banc of America Securities LLC (1.0%)

BNP Paribas Securities Corp. (1.0%)

CIBC World Markets Corp. (1.0%)

Citigroup Global Markets Inc. (1.0%)

Commerzbank Capital Markets (1.0%)

Credit Suisse Securities (USA) LLC (1.0%)

Deutsche Bank Securities Inc. (1.0%)

JP Morgan Securities Inc. (1.0%)

Merrill Lynch, Pierce, Fenner, & Smith Inc. (1.0%)

Morgan Stanley & Co. (1.0%)

National Australia Capital Markets, LLC (1.0%)

RBC Capital Markets Corporation (1.0%)

Scotia Capital (USA) Inc. (1.0%)

SG Americas Securities, LLC (1.0%)

UBS Securities LLC (1.0%)

Junior Co-Managers:

Comerica Securities, Inc. (0.5%)

Fifth Third Securities, Inc. (0.5%)

Structure:

Reopening of the 6.5% Subordinated Notes due 2037

Ratings:

Aa3/A+/AA-(Pos Outlook/Pos Outlook/Stable)

Pricing Date:

October 11, 2007

Interest Accrual Date:

September 12, 2007

Settlement Date:

October 18, 2007

Maturity Date:

September 15, 2037

Form of Note:

Subordinated Notes (Lower Tier II)

Form of Offering:

SEC Registered Global

CUSIP:

404280AH2

ISIN:

US404280AH22

Common Code:

032063519

Principal Amount:

$1,750,000,000

Benchmark Treasury:

UST 4.75% 02/37

Treasury Yield:

4.913%

Treasury Price:

97-15

Re-offer Spread:

UST + 160 basis points

Coupon:

6.500%

Re-offer Yield:

6.513%

Amount of Accrued Interest:

$11,375,000

Price to Investor:

99.821%, plus accrued interest from September 12, 2007 to, but not including, October 18, 2007, the date HSBC Holdings expects to deliver the notes offered by this Final Term Sheet

Gross Fees:

0.875%

Net Price to Issuer:

98.946%

Total Proceeds to Issuer:

$1,731,555,000, plus accrued interest from September 12, 2007 to, but not including, October 18, 2007

Coupon Payment Dates:

Semi-annual on each March 15, and September 15, commencing on March 15, 2008

Call Features:

NCL

Day Count Convention:

30/360

Minimum Denominations:

$100,000 and integral multiples of $1,000 thereafter

Listing:

NYSE

Further Issuance:

The notes will be a further issuance of, and will be consolidated to form a single series with, the US$750,000,000 aggregate principal amount of HSBC Holdings plc’s outstanding 6.5% Subordinated Notes due September 15, 2037. The aggregate principal amount of outstanding notes under this series will be US$2,500,000,000

The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling toll-free 1-866-811-8049.