Lead Managers:

HSBC Securities (USA) Inc. (92.5%)

Co-Managers:

Banc of America Securities LLC (2.5%)

Citigroup Global Markets Inc. (2.5%)

J.P. Morgan Securities Inc. (2.5%)

Structure:

Reopening of the 30 year Global Fixed Rate Subordinated Notes

Ratings:

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

Pricing Date:

December 7, 2006

Interest Accrual Date:

November 2, 2006

Settlement Date:

December 14, 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:

$700,000,000

Benchmark Treasury:

UST 4.5% 02/36

Treasury Yield:

4.612%

Treasury Price:

98-06+

Re-offer Spread:

UST + 115 basis points

Coupon:

6.500%

Re-offer Yield:

5.762%

Amount of Accrued Interest:

$5,308,333.33

Price to Investor:

110.387%, plus accrued interest from November 2, 2006 to, but not including, December 14, 2006 the date HSBC Holdings expects to deliver the notes offered by this Final Term Sheet

Gross Fees:

0.875%

Net Price to Issuer:

109.512%

Total Proceeds to Issuer:

$766,584,000, plus accrued interest from November 2, 2006 to, but not including, December 14, 2006

Coupon Payment Dates:

Semi-annual on each May 2 and November 2

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$1,300,000,000 aggregate principal amount of HSBC Holdings plc’s outstanding 6.5% Notes due May 2, 2036.

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.