Published on 8/11/2021 in the Prospect News Structured Products Daily.
New Issue: HSBC sells $14.07 million contingent income autocalls on Financial, Energy, Consumer funds
By Wendy Van Sickle
Columbus, Ohio, Aug. 11 – HSBC USA Inc. priced $14.07 million of autocallable contingent income securities due Aug. 9, 2024 linked to the worst performing of the Financial Select Sector SPDR fund, the Consumer Staples Select Sector SPDR fund and the Energy Select Sector SPDR fund, according to a 424B2 filing with the Securities and Exchange Commission.
Each quarter, the notes will pay a contingent coupon at an annual rate of 12.5% if each fund closes at or above its coupon barrier, 80% of its initial level, on the determination date for that period.
The notes will be called at par plus the contingent coupon if each fund closes above its initial level on any quarterly redemption date.
The payout at maturity will be par unless any fund finishes below its 80% downside threshold, in which case investors will be fully exposed to any losses of the worst performing fund.
HSBC Securities (USA) Inc. is the agent. Morgan Stanley Wealth Management LLC is the distributor.
| Issuer: | HSBC USA Inc.
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| Issue: | Contingent autocallable income securities
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| Underlying funds: | Financial Select Sector SPDR fund, Energy Select Sector SPDR fund and Consumer Staples Select Sector SPDR fund
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| Amount: | $14.07 million
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| Maturity: | Aug. 9, 2024
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| Coupon: | 12.5% per year, payable each quarter if each fund closes at or above coupon barrier on determination date for that period
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| Price: | Par of $1,000
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| Payout at maturity: | If final share price of least performing fund is greater than or equal to downside threshold level, par; otherwise, full exposure to decline of worst performer
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| Call: | Par plus the contingent coupon if each fund closes above its initial level on any quarterly redemption date
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| Initial levels: | $37.85 for Financial, $70.94 for Consumer Staples, $49.51 for Energy
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| Coupon barrier levels: | $30.288 for Financial, $56.752 for Consumer Staples, $39.608 for Energy; 80% of initial levels
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| Downside thresholds: | $30.288 for Financial, $56.752 for Consumer Staples, $39.608 for Energy; 80% of initial levels
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| Pricing date: | Aug. 6
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| Settlement date: | Aug. 11
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| Agent: | HSBC Securities (USA) Inc.
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| Distributor: | Morgan Stanley Wealth Management
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| Fees: | 2.5%
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| Cusip: | 40439K474
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