Lead Managers:

HSBC Securities (USA) Inc. (91.75%)

Co-Managers:

Banc of America Securities LLC (2.75%)

Citigroup Global Markets Inc. (2.75%)

J.P. Morgan Securities Inc. (2.75%)

Structure:

Reopening of the 30 year Global Fixed Rate Subordinated Notes

Ratings:

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

Pricing Date:

August 16, 2006

Interest Accrual Date:

May 3, 2006

Settlement Date:

August 23, 2006

Maturity Date:

May 2, 2036

Form of Note:

Subordinated Dated Notes (Lower Tier II)

Form of Offering:

SEC Registered Global

CUSIP:

404280AG4

ISIN:

US404280AG49

Principal Amount:

$400,000,000

Benchmark Treasury:

UST 4.5% 02/36

Treasury Yield:

5.006%

Treasury Price:

92-08

Re-offer Spread:

UST + 125 basis points

Coupon:

6.500%

Re-offer Yield:

6.256%

Amount of Accrued Interest:

$7,944,444.44

Price to Investor:

103.262%, plus accrued interest from May 3, 2006 to, but not including, August 23, 2006, the date HSBC Holdings expects to deliver the notes offered by this Final Term Sheet

Gross Fees:

0.875%

Net Price to Issuer:

102.387%

Total Proceeds to Issuer:

$409,548,000, plus accrued interest from May 3, 2006 to, but not including, August 23, 2006

Coupon Payment Dates:

Semi-annual on each May 2, and November 2, commencing on November 2, 2006

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$900,000,000 aggregate principal amount of HSBC Holdings plc’s outstanding 6.5% Notes due May 2, 2036.